Planning for Trade Issue 2020 | UK Global Tariff
12 February 2020
The British Government has issued an information notice regarding their new external tariff (UK Global Tariff – UKGT) that will come into effect on the 01st Jan 2021. This replaces the previous Temporary Tariff Regime proposed last year which would have seen a 0% duty rate on 87% of all imports to the UK.
This is interesting as it shows a hardening of approach by the British Government.
Last year, with the possibility of a no deal looming, tariff rates were proposed to widely remain at 0% and the controls at the border were intended to be minimal.
The new proposal, however, is for a more regulated approach with tariffs and full customs checks at the borders including agricultural controls on food products. This approach is consistent with the comments made by UK Chancellor of the Exchequer, Sajid Javid, earlier in January that more friction at the borders is inevitable.
With regard to Tariffs, the Government is opening up consultations to the public concerning the structure of the new UK Global Tariff, which you may be interested in responding to. The consultation will close on 05th March at 23.59.
The British Government has advised that the Consultation will provide an opportunity for companies to provide:
- Their views on a potential series of amendments being considered to the tariffs the UK currently applies through the EU’s Common External Tariff (Specifically: simplifying and tailoring the UK Global Tariff policy, removing tariffs on goods imported by UK businesses to manufacture other goods and where the UK has zero or limited domestic production)
- Specific feedback on specific products or commodity codes of importance to them, including on the corresponding tariff rate; and
- Information on their interactions with the MFN tariffs of other countries and the importance of tariffs to their sectors.
On a positive note, the UK have mentioned that they intend to:
- Significantly simplify their tariff and getting rid of nuisance tariffs (any tariff less than 2.5%)
- Remove Tariffs on key inputs to production
- Remove tariffs where the UK has zero or limited domestic production.
Agricultural tariffs - which in the EU external tariff can take many different forms (e.g.. specific tariffs, compound tariffs, mixed tariffs etc) may also be simplified to a single ad valorem rate.