When importing products from the EU into UK, you do not need to pay import duties, as stated in the UK-EU Trade and Cooperation Agreement. Additionally, you do not need to do so when importing products from Northern Ireland into Great Britain (that is England, Wales or Scotland).
This guide explores import duties and tariffs from the perspective of UK companies buying from suppliers in the EU, including information on the UK-EU Trade and Cooperation Agreement, and how to know which tariffs apply to a product.
Methodology
We used the following sources from the official UK Government website:
a. Trade Tariff: look up commodity codes, duty and VAT rates
b. UK-EU Trade and Cooperation Agreement
c. Public Consultation on the UK Global Tariff
d. EXPLANATORY MEMORANDUM TO THE CUSTOMS TARIFF (PREFERENTIAL TRADE AND TARIFF QUOTAS) (EU EXIT) (AMENDMENT) REGULATIONS 2022
e. Tax and customs for goods sent from abroad
f. MOVING GOODS FROM GREAT BRITAIN TO NORTHERN IRELAND?
Additionally, we used the following sources:
a. The European Commission’s page dedicated to The EU-UK Trade and Cooperation Agreement
b. Ireland’s official website’s page dedicated to Customs implications of trade with Northern Ireland
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What are tariffs?
According to the UK’s Department for International Trade, tariffs are taxes that are applied to products imported into the UK. Importers must generally pay any tariffs due, and the costs of these tariffs might subsequently be passed on to consumers.
A tariff is calculated based on factors such as the following:
- Type of goods (e.g., apparel)
- Value or weight of the good (e.g. GBP 1,000)
- Country of Origin (e.g. France)
- Use of the goods
While most tariffs are calculated as a percentage of the customs value (e.g., 5%), for some goods the calculation may be more complex, for example, 10% + GBP 300/100 Kg.
What is an import duty?
The UK’s Department for International Trade states, in its “Public Consultation on the UK Global Tariff” document, that “import duty” and “customs duty” are more formal terms for “tariffs”.
What is the difference between tariffs and import duties?
As explained in the previous section, both “tariffs” and “import duties” refer to taxes that are applied to products imported into the UK.
UK-EU Trade and Cooperation Agreement
The UK-EU Trade and Cooperation Agreement, which was signed by the EU and the UK and entered into force on 1 May 2021, provides preferential arrangements in many areas, including:
- Trade of goods
- Trade of services
- Intellectual property
- Transportation
- Energy
- Fishery
- Social security
Specifically, the document includes a Free Trade Agreement among the parties.
Do tariffs or import duties apply to imports from the EU to the UK?
Tariffs do not apply to products imported from the EU into the UK because of the UK-EU Trade and Cooperation Agreement.
We quote from the agreement:
ARTICLE 21
Prohibition of customs duties
Except as otherwise provided for in this Agreement, customs duties on all goods originating in the other Party shall be prohibited.
ARTICLE 22
Export duties, taxes or other charges
1. A Party may not adopt or maintain any duty, tax or other charge of any kind imposed on, or in connection with, the exportation of a good to the other Party; or any internal tax or other charge on a good exported to the other Party that is in excess of the tax or charge that would be imposed on like goods when destined for domestic consumption.
2. For the purpose of this Article the term “other charge of any kind” does not include fees or other charges that are permitted under Article 23.
How do I know which rate applies to a product?
You can use the “Trade Tariff: look up commodity codes, duty and VAT rates” page on the UK’s official website to find out which rate applies to your product, by entering either the product name or the commodity code.
1. Click the green “Start now” button.
2. Search the UK Integrated Online Tariff by entering a product name or the commodity code.
Note that if you enter a general keyword (e.g,. gloves), the system will ask you to specify what type of gloves (by choosing between several options).
For example “Gloves, mittens and mitts > Other” corresponds to the commodity code “4015190000”.
3. At this point, you should see different duty rates. For example:
a. European Union: 0.00%
b. Third country: 2.00%,
Where “Third country duty” is defined as the tariff that is applicable to countries that don’t have a trade agreement with the UK.
In some cases, additional measures may also apply – for example, anti-dumping duties.
What are preferential tariffs?
According to the UK Explanatory Memorandum to the Customs Tariff Regulations 2022, a preferential tariff is an import duty rate that is lower than what would usually be charged by the UK.
This rate is known as the “UK Global Tariff”, or the standard import duty rate, and applies to all products imported into the UK, unless the product’s country of origin has a trade agreement with the UK, such as the UK-EU Trade and Cooperation Agreement.
If we refer to the previous example, EU countries are granted preferential tariffs for Gloves, mittens and mitts (0% instead of 2%).
How do I calculate the payable tariffs or import duties?
Import duties should be calculated based on the customs value, which includes:
- The value of the goods
- The cost of the packing
- The cost of the transportation
- The cost of the insurance
Once you know the customs value, and the country where you are importing from, you can use the service available on the UK official website (Trade Tariff: look up commodity codes, duty and VAT rates) to find out about the import duty for your product, which is generally calculated as a percentage.
Note that VAT is added on top of customs value and tariffs.
Case study: Cotton handkerchiefs (commodity code: 6213200090)
- Value of the goods: GBP 20,000
- Cost of the packing: GBP 1,400
- Cost of transportation: GBP 1,200
- Cost of the insurance: GBP 350
Customs value: GPB 22,950
You can now calculate the import duties, as a percentage of the customs value.
For example, if you were importing cotton handkerchiefs from a country in the EU, the import duty would be 0%
However, if you were importing cotton handkerchiefs from a country that doesn’t have a trade agreement with the UK, the import duties would be 10%, or GBP 2,295.
Note that the duty rate is different depending on the product.
Northern Ireland Import Tariffs & Import Duties
EU to Northern Ireland
While Northern Ireland remains part of the UK customs territory, when it comes to movement of goods it remains within the EU single market.
One of the implications is that there are no import duties or tariffs when importing from the EU to Northern Ireland.
Northern Ireland to the rest of the UK
There are no import duties when importing goods from Northern Ireland to Great Britain (England, Wales, or Scotland).
