The Department for International Trade (DIT) has launched a public consultation on its proposals for a new UK customs tariff, to be implemented at the end of the Brexit transition period.
The new tariff will be known as the UK Global Tariff. Its implementation will be necessary as the UK is currently still party to the EU’s tariff which currently applies to imports into the EU, including the UK. The UK Global Tariff will set out duty rates that will apply to goods entering the UK after the end of the transition period - currently scheduled to conclude on 31 December 2020; this will be the UK’s WTO tariff. As is currently the case, there will be exceptions to these rates, for example for goods qualifying for free-trade agreements the UK has negotiated, or where the UK has agreed to tariff-quota reductions.
The Government appears to have completely abandoned the draft no-deal Brexit tariff it published in March 2019, saying that it is no longer required now a no-deal Brexit has been averted. It can therefore be expected that the new tariff will differ significantly from that previous version. If nothing else, the removal of the extensive zero tariffs promulgated by the original no-deal Brexit tariff would remove one of the barriers to negotiating future free-trade agreements.
So far, no draft of the new tariff has been published. Instead, DIT has asked for stakeholders to comment on some high-level proposals.
Firstly, the government plans to remove tariffs where the UK has zero or limited domestic production of those goods or on ‘key inputs to production’, ie goods which UK businesses import for use in production and manufacturing of other goods; this is a consistent feature of the current EU tariff which the UK has to apply.
It also proposes to simplify the tariff so that it is easier for businesses to understand and use, for example by rounding duty rates down to the nearest standardised band (e.g. a 12.3 per cent tariff becomes 10 per cent). We suggest this is not a simplification of the tariff in its truest sense as the classification of goods, the commodity code that determines the tariff applied, will remain as complex as it currently is because the UK does not control the internationally accepted classification principles administered by the World Customs Organisation.
More generally, DIT wants:
- stakeholders’ views on changes to the EU tariff to create a bespoke UK tariff regime;
- specific feedback from importers on individual products or commodity codes of importance to them, and their duty rate; and
- information on importers’ interactions with other Most Favoured Nation tariffs (ie those set on WTO terms) and the importance of tariffs to their sectors.
Closing date for comments is Thursday 5 March 2020. The government says an announcement on the UK’s new tariff will follow shortly afterwards.
Additionally, a Government minister confirmed in a speech yesterday what many knew would be the reality of the UK leaving the EU - that customs controls and checks would be inevitable at the UK border for goods imported from the EU. In a more surprising move, it appears that the 'easements' in relation to imports from the EU introduced by the previous Prime Minister may be rolled back. We will confirm the full details of the implications of this when a more formal announcement is made.