The new UK Global Tariff (UKGT) has been published here.
This follows a public consultation on its earlier proposals. The Government had had regard to the principles set out in the Taxation (Cross-border Trade) Act 2018, including the interests of consumers and producers in the UK and the extent to which the goods concerned are subject to competition.
The UKGT will apply to all goods imported into the UK from Most Favoured Nation countries from 11pm on 31 December 2020, unless an exception applies. The UKGT will not apply to goods coming from developing countries that benefit under a specific scheme, for example the Generalised System of Preferences, or to goods originating from countries with which the UK has negotiated a Free Trade Agreement. It will not alter the protection in place from trade remedies which are being transitioned to the UK system. The main changes from the EU Common External Tariff are set out here:
- Removing all tariffs of less than 2%, also known as ‘nuisance tariffs’;
- Rounding tariffs down to the nearest standardised band, which will be:
- Tariffs under 20% are rounded down to the nearest multiple of 2%. This applies to 4256 tariff lines. This was changed from increments of 2.5% following feedback received from companies during the consultation which suggested that banding of 2.5% would see reduced protection from competition for a range of sensitive producers in the UK and exporters to the UK from developing countries.
- Tariffs between 20% and 50% are rounded down to the nearest multiple of 5%. This applies to 78 tariff lines.
- Tariffs above 50% are rounded down to the nearest multiple of 10%. This applies to 5 tariff lines.
- Removing tariffs on key inputs to production. This has been carried out for 2900 product lines but many intermediate products have retained tariffs. In addition to the review of consultation responses, the Government conducted analyses to identify products in the scope of this classification that should be exempted from liberalisation, particularly where domestic sectors or developing countries exporters would face increased competition. The Government have also identified products where retaining tariffs offers incentives for prospective FTA partners to offer us greater market access as part of negotiations, to help UK exporters.
- Removing tariffs where the UK has zero or limited domestic production.
- Taking steps towards agricultural tariffs that are applied as single percentages.
Further information on the consultation and the Government’s policy response, including the rationale for the broad changes outlined above, can be found here.
There are no current plans to review the schedule but as with all policies, the Government will remain open to stakeholder feedback and keep its policy under review. BEIS sees it as its job to represent industry’s interests in policy development across Government. Please let BRPPA know your thoughts on this (through email@example.com) and we will follow them up with BEIS.