The UK Global Tariff (UKGT) regime will replace the EU’s Common External Tariff on 1 January 2021 at the end of the Brexit Transitional Period, it has been announced.
According to the Treasury, the UK’s new Most Favoured Nation (MFN) tariff scheme will make it “easier and cheaper for businesses to import goods from overseas”.
This will be achieved by scrapping red tape and other “unnecessary barriers to trade”, reducing cost pressures, increasing choice for consumers, and backing UK industries to “compete on the global stage”.
Details of the new regime also suggest that almost 6,000 tariff lines will be streamlined and simplified, further reducing costs for businesses by eliminating administrative burdens. This includes “scrapping unnecessary tariff variations”, “rounding tariffs down to standardised percentages”, and “getting rid of all ‘nuisance tariffs’” – defined as those below two per cent.
The EU’s “complex” Meursing table will also be scrapped, reducing or eliminating tariff variations on more than 13,000 products, such as biscuits, waffles, pizzas, quiches, confectionery, and spreads.
Additionally, the UK’s new tariff regime will ensure that “60 per cent of trade will come into the UK tariff free on WTO terms” or “through existing preferential access from January 2021”.
This includes removing tariffs on “£30 billion worth of imports entering UK supply chains”, such as zero per cent tariffs on products used in UK production, including copper alloy tubes (down from 5.2 per cent), screws and bolts (down from 3.7 per cent), dishwashers (down from 2.7 per cent), sanitary products and tampons (down from 6.3 per cent), and paints (down from 6.5 per cent).
Commenting on the new regime, International Trade Secretary Liz Truss said: “Our new Global Tariff will benefit UK consumers and households by cutting red tape and reducing the cost of thousands of everyday products.
“With this straightforward approach, we are backing UK industry and helping businesses overcome the unprecedented economic challenges posed by Coronavirus.”
For more information about the new UKGT regime, please click here.
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