The UK government has published the proposed customs duty rates that will apply to imported merchandise entering the UK from third countries after the country has left the European Union (EU) under a so-called no-deal scenario. Unless recent political developments require the UK government to extend that deadline, it has been indicated that the UK will leave the EU on October 31, 2019.

How and When Will This Apply?

After the UK leaves the EU, it is free to set its own customs duty rates for imports subject to its commitments to the World Trade Organization (WTO), which set the maximum ceilings that can be applied by the UK after it becomes a full WTO member in its own right. Today’s announcement of the UK tariff regime means that, in the event of a no-deal departure, goods entering the UK from both the EU and any other of the UK’s trading partners where no preferential trade arrangement is in place (e.g., the US, China, Canada, Taiwan, etc.) will be subject to these duties. The UK can set its own customs duty rates in such a scenario because, upon departure from the EU’s Customs Union and Common Customs Tariff, it does not need to keep the same rates of customs duties as those applied by the EU. An exceptional review process has also been announced, which will apply as of exit day and which will enable changes to be made to the regime if necessary. In addition, businesses and consumers will be able to provide feedback on the impact of the regime through an online submission.

Overall Reductions 

The UK is intending to eliminate all customs duties for imports, from all third country trading partners, for 88% of total imports by value, according to the UK government’s plan. These reductions will be applied on a “temporary basis” for a period of up to one year following their introduction. From January, the UK government will undertake a full consultation on a more permanent approach to tariffs in order to develop their independent trade policy. If necessary, duty rates could be increased for these imports in the future. However, during the period of temporary application, UK businesses will not pay customs duties on a significant portion of UK imports.

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