Today the UK Government published updates to its ‘no-deal tariffs’ – the import tariffs it will apply if the UK leaves the EU with no-deal. Changes to the previously published no-deal tariffs (issued in March) are:
- Bioethanol – tariffs added
- HGVs – proposed tariffs reduced from 22% to 10%
- Textiles and clothing: a lot more categories of clothing will be subject to tariffs
The HGV tariff reduction will be welcome by UK businesses operating fleets of trucks: for example, if you spend £3m a year buying EU manufactured HGVs then a 12% drop in tariffs is a big gain – but it is still 10% more than you currently pay.
The big change is on textiles and clothing. I counted over 40 additional categories of clothing added today to the previous tariff schedule published in March. These tariffs will bite on imports from Turkey (in EU customs union so currently zero tariff) as well as EU countries like Italy. The additions are designed to maintain the benefit of continued zero tariffs on imports from developing countries. Clothing retailers and importers should urgently review the implications for costs and pricing and assess what mitigation may be possible in the supply chain before and after 31 October.
HMRC has also published its impact assessment of a no-deal Brexit, which estimates that the additional paperwork costs of completing customs declarations will be between £20 to £56 per consignment for imports and £17 to £46 per consignment for exports.
This highlights the importance of businesses reviewing customs processes in the run up to Brexit. Bear in mind that customs will change if there is a deal as well as in a no-deal Brexit and whenever our customs experts review a client’s processes, they usually find some cost savings regardless of Brexit. My customs and VAT colleagues have put together a handy guide: Brexit and indirect tax .
Alongside this, the UK government has published a 155 page No-deal Readiness report. This is a handy compilation of all the Government’s advice on the regulatory and administrative changes that will occur in the event of no-deal (many also apply in the event of a Brexit deal too). It’s a good reference document for business (you may just want to skip the government spin in the first ten pages); you can also access the government’s comprehensive advice guides in an interactive format online: www.gov.uk/brexit
Government continues to ramp up its no-deal planning. A Downing Street source was reported as saying yesterday – “We’ll either leave with no deal on 31 October or there will be an election and then we will leave with no deal.”
Clothing retailers and importers should urgently review the implications for costs and pricing and assess what mitigation may be possible in the supply chain before and after 31 October.