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updated 17 July 2020

Following a referendum held in the UK in June 2016, the UK voted to leave the European Union. An outline for the withdrawal of the UK from the EU and its institutions (the Withdrawal Agreement) and a Political Declaration on next steps was agreed and the UK formally left the EU on 31st January 2020.


There is now a transition period until the end of 2020 while the UK and EU negotiate new arrangements.


Transition Period

For the remainder of 2020, nothing has changed in respect of trading with the EU or with other countries.


The UK and the EU have undertaken to agree an ambitious Free Trade Agreement with zero tariffs and a comprehensive security partnership, but it is not yet known if this can be agreed for implementation on 1st January 2021.


The UK Government has stated many times that the Transition Period will not be extended and that business must prepare to trade with the EU on the same terms as we trade with other countries (often referred to as “WTO Terms”).


Changes from 1st January 2021

Customs and Trade Law

The UK will have its own customs law and trade policy. This will be developed over the coming months.


Duty Rates on Imported Goods

The UK Global Tariff has now been published. These tariffs will apply to imports from the EU and the rest of the world, except where lower tariffs are agreed as part of a Free Trade Agreement.


Compared to the current EU tariff, duty rates have been rounded down to whole numbers and rates below 2% have been removed. Tariffs have also been reduced or removed on a number of products.


Anti-dumping duty will also be removed on a large number of goods.



A consultation has also been launched on the possible creation of up to 10 UK freeports with special tariffs and duty status.


Free Trade Agreements (FTAs)

As well as an agreement with the EU, the UK will be looking to transition the current FTAs with other countries from which we currently benefit as a member of the EU. This is to enable trade to continue with Japan, Canada, Singapore and others on reduced, often zero, tariffs.


The UK will also adopt its own Generalised System of Preferences (GSP) scheme to allow developing countries preferential, mostly duty free, access to the UK.


Import and Export Declarations

As the UK will leave the Single Market and the Customs Union, customs declarations will be needed to import from and export to the EU 27 Member States. However, recognising that Covid-19 has disrupted business planning, the Government has announced that full UK border controls will not apply to all EU imports until 1st July 2021. For most goods imported between January and June, an import declaration to HMRC need not be made until up to six months following importation. However, different arrangements will apply to certain ‘controlled’ goods such as products of animal origin, fish, plants, steel and goods subject to excise duty (e.g. alcohol).


Full declarations will be needed for all goods exported to the EU and these must be pre-lodged with HMRC before the goods travel to the port.


VAT on Imports

The UK will introduce a system of Postponed Accounting for Import VAT, ie. whereby registered VAT traders can simply account for import VAT in their periodic returns rather than actually paying the tax at import. This will apply to imports from all countries.


However, all low value goods (£135 or below) will be subject to import VAT and a new process for the collection of the VAT will be introduced for small packages sent from a supplier overseas. There will also be a new declaration procedure for low value goods imported in bulk (eg. through e-commerce arrangements).


Authorised Economic Operators (AEO)

The UK will be adopting its own AEO scheme which is expected to remain aligned to the current EU scheme. It may facilitate trade with the EU if your business is authorised as an AEO, trusted trader.


Northern Ireland

Under the Northern Ireland Protocol, there will be an open border on the island of Ireland. Northern Ireland will be in the UK customs territory but will remain aligned with EU trade regulations.There will be no duty on goods moving from GB to NI unless the goods are “at risk of moving to Eire” in which case they will be subject to the EU tariff. There will be some limited additional procedures applied to agri-foods and certain special goods, such as endangered species, arriving in NI.


The detail of this arrangement has not yet been published.


Changes from 1st July 2021

From this date, the same procedures will apply to EU imports as imports from the rest of the world and declarations to import goods from the EU must be filed with HMRC before or at the time of import. Pre-arrival Security and Safety declarations will also be needed.