Guidance
Classifying goods in the UK Trade Tariff if there's a no deal Brexit
Guidance outlining how UK businesses can classify goods as part of the customs declaration process if the UK leaves the EU without a deal.
Introduction of new customs procedures
Anyone exporting goods to the EU from the UK or importing goods to the UK from the EU will have to comply with customs procedures that were not previously necessary. This includes:
- declaration of goods
- new controls to ensure public safety, security and health
- payment of duty
Rates of duty under WTO rules
Goods traded between the UK and the EU will have to be treated by both countries the same way as goods from elsewhere in the world, until a preferential trading agreement can be established.
The principle of Most Favoured Nation (MFN) will apply, under World Trade Organization (WTO) rules. This means that the same rate of duty, on the same good, must be charged to all WTO members equally, unless a suitable trade arrangement, such as a free trade agreement, or unilateral preference, is in effect.
Duty rules on UK exports to the EU
EU businesses importing goods from the UK will be required to pay customs duty on those goods at the rate under the EU Common Customs Tariff (CCT).
Without a preferential agreement in place, the EU will apply its ‘Most Favoured Nation‘ rates on goods imported into the EU. These are set out in the EU CCT, where they are referred to as ’erga omnes‘ (which translates as ’towards all‘) rates, rather than stating a specific country.
The EU may change these rates between now and March 2019, but the current CCT provides an indication.
Duty rules on UK imports from the EU
In preparing for ’no deal‘ Brexit, businesses should be aware that the UK will also be required apply its MFN rates to goods imported into the UK from the EU.
UK importers will be required to pay customs duty at the rates set out in the UK Trade Tariff. Future UK rates may differ from current EU rates.
HMRC already publishes tariff data online for use by UK traders with third countries (that is, non- EU countries). Those currently importing goods from third countries into the UK will be familiar with this system.
The EU CCT will no longer apply for imports to the UK.
Classification of goods by UK importers
Broadly speaking, the amount of import duty an importer needs to pay will be based on the classification of goods under the UK Trade Tariff system and the good’s country of origin. It is also affected by the value of the goods or, in some cases, the weight or other measure.
The importer (or their agent) must decide the correct classification of their goods using the guidance in the Trade Tariff (although it should be noted that the guidance is not the legal text of the Trade Tariff).
This will require knowledge of the item being classified, as well as its constituent parts, including:
- what it is made of
- what purpose it will be used for
- where it was made (known as ’origin‘)
The process of classification will result in a numeric commodity code.
Commodity codes in the UK Trade Tariff
Commodity codes will be listed in the UK Trade Tariff, with the rate of import duty applicable to goods falling within those codes. Duty rates are shown either by formula or percentage of the customs value of the goods.
The tariff will also set out import procedures. This includes how the value of a good is calculated, and which forms, codes, and procedures are to be used.
The UK does not intend to make immediate changes to any commodity codes, except to align to international standards, or when related to trade remedies. However, the rules will be set out in new UK regulations rather than EU ones.
Unilateral preferences and trade agreements
The government intends to continue offering unilateral trade preferences to developing countries, and to seek to transition all EU free trade agreements for day one of EU exit. This will ensure continuity for both goods imported to the UK, and for UK exports.
Maintaining these benefits is of clear importance to businesses, developing countries, consumers and investors, and will ensure a smooth transition for users of these provisions as we leave the EU.
Find further information on preferential trade under the UK’s existing trade agreements in the Trade Existing free trade agreements if there’s no Brexit deal technical notice.
Find out more about classifying goods
Read our guidance on:
- current UK trade tariffs
- classifying goods using the UK trade tariffs
- classification in HMRC’s Notice 600: classifying your imports or exports
- classifying manufactured products, vehicles, foodstuffs, pharmaceuticals, chemicals and raw materials - this includes DEFRA advice concerning the specific procedures applied to agricultural products
If you’re exporting to the EU, check the Integrated Tariff of the European Community (TARIC).
Contact HMRC’s Tariff Classification Service if you need help with tariff classification.
Learn more about customs declarations, duties and tariffs
- importing and exporting
- HMRC public notices
- the WTO
Further information
For further details read:
- Trading with the EU if there’s no Brexit deal technical notice for more information on import processes
Contact us if you still have a question about classifying your goods after Brexit.
Published 19 December 2018
