UK-EU Trade Deal Explained

Posted: Jan 7, 2021
Expert:
Adrian Young

The EU and UK have now signed a Trade Deal 'EU-UK Trade and Cooperation Agreement' which although is stated as being ‘Tariff Free’ is not actually the case. This article provides some background as to its key points and actions.

HURST UK-EU Trade Deal Explained

‘Tariff Free’ status means the following:-

Imports into the UK from the EU

There will be no customs duty on goods imported into the UK that originate in the EU.

What do I need to as a UK importer?

Ask your EU supplier(s) whether the goods they supply to you originate in the EU as otherwise UK customs duty will apply.

Exports to the EU from the UK

There will be no customs duty on goods imported into the EU that originate in the UK. 

What do I need to do as a UK exporter?

  • check your goods qualify as originating in the UK.
  • if so, provide a statement of UK origin on your sales invoice quoting your UK EORI number.

The above means that finished goods or goods imported into the UK from 1/1/2021 on payment of UK customs duty, which are not sufficiently processed as to confer UK originating status, will, if then exported to the EU, be subject to EU customs duty on import into the EU.

This would then mean double duty is applicable. In order to counter this, you should consider:

  • For goods imported which are stored and then re-exported, obtaining customs warehouse authorisation to avoid paying UK customs duty on goods imported into the UK
  • For goods imported, processed and potentially re-exported, obtaining Inward Processing authorisation to avoid paying UK customs duty

NB: Goods imported into the UK from 1/1/2021 under Inward Processing (“IP”) which are sufficiently processed as to confer UK originating status, will, if then exported to the EU, not be subject to EU customs duty on import into the EU. In this case as a UK importer/exporter you should:

  1. obtain UK IP authorisation to avoid paying UK customs duty on the goods (components, raw materials) imported for processing.
  2. provide a statement of UK origin on your sales invoice quoting your UK EORI number.

For Goods already in the UK at 31 Dec 2020

Goods in the UK as at 31/12/2020 having been imported from a non-EU Member State on payment of EU customs duty, which have not been sufficiently processed as to confer UK originating status, will, if exported to the EU from 1/1/2021, be subject to EU customs duty on import into the EU. 

To deal with this you should obtain UK retrospective IP authorisation to reclaim the duty paid on import of the goods into the UK. Time limits apply.

We would like to acknowledge the assistance of The Customs People in pulling together this guidance.

If you are looking for support with international operations then we can help. Contact us at inspired@hurst.co.uk or by calling 0161 477 2474.