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We’re now over half-way through October and whether we leave the EU with a deal is anyone’s guess.

One day we’re told it’s practically impossible. The next we hear that we’re making good progress, but it will be difficult.

We’ll find out soon enough. But if your business trades goods with EU countries, you’ll need to know what tariffs will apply if there is a no-deal Brexit.

WTO tariffs and quotas

Without a deal, the UK will have to trade with EU countries under World Trade Organization (WTO) rules. This means that agreed tariffs will apply to imports and exports.

To make things more complicated still, the tariffs that apply to some goods are subject to tariff rate quotas (TRQs). These allow a country to import a certain amount of a product at a zero or low tariff rate, with a higher rate being applied to imports over that quota.

To give an example, beef products below certain quotas attract a 0% tariff. Over that quota, a higher tariff applies.

You also need to know that some quotas are annual, while others are quarterly. If you import corned beef in airtight containers, there’s a 0% tariff if it is brought into the UK with a quarterly quota. If none of that quota remains, then you have to pay an 8.8% tariff. The quota ranges from just over 11.8 million kilos in Q1 to a little more than 13 million kilos in Q2.

Are your goods subject to tariffs? 

Your main concern will be whether the products you trade will attract tariffs. There’s no easy answer to this – WTO’s list of goods is both long and highly detailed. You’d think aluminium foil was a fairly simple item to define for trade purposes, wouldn’t you? Once you’ve read this definition, you will certainly change your mind!

Aluminium foil, not backed, rolled but not further worked, of a thickness of < 0,021 mm, in rolls of a weight of <= 10kg (excluding stamping foils of heading 3212, and foil made up as Christmas tree decorating material), of a thickness of 0,007mm or more but less than 0,021mm.

This type of foil attracts a tariff of 7.5%. If you want to learn about other types, you’ll have to look it up for yourself.

WTO tariffs cover everything from cars to tractors, bananas to bioethanol, ceramics to cheese and sugar to underpants. You can find the full list here.

Will my goods be within quota?

Your next thought will be whether your goods will be within quota. If they are included in the tariff rate quota (TRQ), then it will be cheaper for you.

There’s no way of guaranteeing this, however. The UK is planning to allocate each quota on a first-come, first-served basis. It would seem, therefore, that the quicker you can apply each year (or each quarter, if relevant), the better chance you will have. You can find more details about TRQs here.

What next?

It’s quite possible that you won’t need to worry about tariffs or quotas – it’s conceivable that the UK will leave the EU with a deal. But if we don’t, and you’re not prepared, things could get expensive for your business. If you have any questions at all, please do get in touch by giving us a call on 020 8989 5147 or coming to see us at one of our offices in ChelmsfordCheamWansteadSaffron Walden and London City.

Avatar for Kirsty Demeza
About Kirsty Demeza

With a portfolio that ranges from startups to companies with a £10 million turnover, Kirsty’s talent for working closely with her clients ensures her services remain in strong demand.

“The most rewarding part of my role is seeing clients succeed,” she says. “When you help a new business and watch it expand into new premises and secure big contracts, it’s a great feeling.” Kirsty never finds two days are the same.

As well as providing accounting services that range from self-assessment tax planning and VAT to audit and accounts, she’s part of THP’s sales team and closely involved in helping our trainees to develop their skills.

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