A 10% tariff on cars will remain to support UK businesses © Getty Images
A 10% tariff on cars will remain to support UK businesses © Getty Images

Post-Brexit tariffs to support UK supply chains

20 May 2020

The UK government announced it is removing tariffs on £30bn worth of imports entering UK supply chains as part of post-Brexit plans. 

The government said the UK Global Tariff (UKGT), which is set to come into effect on 1 January 2021, would streamline and simplify nearly 6,000 tariff lines. 

Under the UKGT, tariffs on £30bn worth of imports used in manufacturing such as copper alloy tubes, screws and bolts would be removed to make it “cheaper and easier” for UK businesses to import goods from overseas, the government said. 

Tariffs will also be cut to zero on products to support a sustainable economy such as thermostats (from 2.1%), vacuum flasks (from 6.7%), LED lamps (down from 3.7%) and bike inner tubes (from 4%).

Some tariffs are set to remain in place including those on agricultural products such as lamb, beef, and poultry and a 10% tariff on cars to support UK businesses. 

The government said the new tariff schedule would “scrap red tape and other unnecessary barriers to trade, reduce cost pressures and increase choice for consumers and back UK industries to compete on the global stage”. 

Almost all pharmaceuticals and most medical devices (including ventilators) are tariff-free in the UKGT, but some products used to fight Covid-19 maintain a tariff. 

“To ensure those working on the frontline can access vital equipment easily, the UK has introduced a temporary zero tariff rate on these products. This relief waives the tariff and VAT for personal protective equipment, medical devices, disinfectant and medical supplies from non-EU countries,” the government said. 

Commenting on the new tariff schedule, Andrew Hood, partner, regulatory and trade at law firm Fieldfisher, said: “The simplification of tariffs is always welcome but the change in the tariff levels will see both winners and losers across the UK.  

“Obtaining a comprehensive free-trade agreement with the EU before the transition period remains the preference of nearly all businesses we speak to – ensuring no tariffs and no increased administration when continuing to trade with the EU.

“All manufacturing businesses in the UK and those that trade in goods with the UK will need to understand rapidly how this affects their long-term cost base and commercial contracts in the event these new tariffs (and the upcoming tariff quotas) come into effect on 1 January 2021.”

Meanwhile, a draft proposal for a Free Trade Agreement with the EU published by the UK government has been praised for taking the freight industry’s concerns into account. 

Sarah Laouadi, European policy manager at the Freight Transport Association, said: “It is a good starting point for UK negotiators to engage with the EU. As always, the devil is in the detail, and we look forward to working closely with government in the coming months on the areas of the agreement which still need work, to ensure that our members can have sufficient time to prepare for whatever the final outcome of the UK/EU negotiations may be.”

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