• No-deal Brexit

    Government releases tariff with details of customs duty rates


No-deal Brexit: Government releases tariff with details of customs duty rates

12 April 2019

The Government has published a new customs tariff for the UK to use in the event of a no deal Brexit. This tariff reduces the duty rates on a large number of products on a temporary basis and it is expected that 87% of UK imports will now be subject to zero duty.

The UK currently uses the common tariff of the European Union and needs to replace this with a UK only version if a no deal Brexit creates a hard customs border between the UK and the EU.

The new UK tariff is a 1400 page guide listing the customs duties that will apply to each type of good entering the UK after any no deal Brexit takes effect. It will apply to all imports, not just to goods arriving from the EU. HMRC has also published details of countries which will be entitled to preferential rates of duty to those shown in the new tariff. This includes developing countries qualifying for the Generalised Scheme of Preferences (GSP), plus information on bilateral free trade agreements it has reached with some countries, including Switzerland, Chile and Israel. 

The Government says the tariff is temporary and will be in place for up to 12 months after a no-deal Brexit.

During this period, most goods will be subject to a nil duty rate, ie no customs duty will be payable. It should be noted however, that not all tariffs have been reduced and there are still a number of products that will remain subject to duty. The Government appears to have focused customs duty on sensitive industries such as the automotive sector, retaining current EU rates in many cases. For example, cars are still subject to a 10% rate of duty.

While the UK government and the EU have agreed a Brexit extension to keep the UK in the EU a little longer, the risk of a no-deal Brexit remains until a withdrawal deal is approved by Parliament. 
Businesses should therefore continue preparations to keep their goods moving across the UK/EU border should a no-deal Brexit occur at any point. 

All traders who move goods across the UK/EU border should:

  • make sure they have an Economic Operator Registration and Identification (EORI) number, which is required to make customs declarations and for applying for authorisation to use customs simplifications and procedures. HMRC’s online application process can be accessed here
  • check the draft UK-only tariff for any changes to the classification or duty rate on the goods they import.
  • consider registering with HMRC to use transitional simplified procedures (TSP) to declare their EU goods to customs. This will allow importers to defer making a full declaration and paying customs duty until after the goods arrive in the UK. Applications to register for the TSP scheme can be submitted online here. Applicants must hold an EORI number and apply to defer payment of import duties, which requires a financial guarantee. 

The following BDO information may also be useful:

Brexit: the no deal plan for customs declarations
BDO Hard Brexit Trade Assessment
BDO microsite: Brexit planning for business
BDO Insight: Why Authorised Economic Operator status is essential for manufacturers with non UK supply chains
BDO Insight: Brexit - Government sets out its no-deal plan for VAT