UK businesses that have goods in Europe which you need in the UK, or goods in the UK that you wish to sell in Europe should act NOW, says tax expert Andrew Oury.
If you’re a UK business with goods you need to move in or out of Europe, you should move them NOW – before potential tariffs post 1st January 2021.
Even if the miraculous happens and we get a last-minute trade deal meaning no tariffs, which is unlikely, there will be customs paperwork and other legal requirements from the 1st January 2021.
?Perversely, if you wish to import goods into the UK post 1st January from a non-EU country you are likely best to wait.
Let’s take the recent row over Soy Sauce as an example. This is a perfect illustration of how goods from Europe may get expensive but goods not from Europe, as we already know, will mostly be getting cheaper.
The import rate for the EU (including the UK until 1st January 2021) is currently 7.7% for Soy Sauce from any ?third country” – i.e. a non-EU country. So a bottle of Soy Sauce from China, or indeed Australia would have a duty of 7.7% added.
This rate is in place except when there is a separate free trade agreement or other relief. While the EU has a free trade agreement with Japan, meaning a zero rate of duty on importing Soy Sauce into the EU, the UK has actually signed a very similar free trade agreement with Japan. So we will still get Soy Sauce at the current rate.
In fact, the UK has published the UK Tariffs for all goods after the 1st January coming from ?third countries” (i.e. not EU) and the UK has taken the EU current tariffs and almost across the board lowered them.
Staying with Soy Sauce as an example, Soy Sauce from any third country without a free trade agreement is at 6% not 7.7%. Therefore it will likely be cheaper to buy Soy Sauce from Japan rather than from Europe after 1st January.
“This highlights how the UK will be incentivised to source goods from countries other than Europe in the case of a No-deal.
For any business importing goods into the UK you need to check your tariffs online and make your decisions accordingly.
About Andrew Oury
Andrew Oury, Partner at Oury Clark, is a chartered accountant and tax advisor dedicated to helping his clients navigate the complexities of doing business in the UK. He specialises in assisting UK, East Coast US, Australian, New Zealand, Singaporean, Icelandic and Indian businesses expand and grow in the UK.
Andrew has a wide range of clients, from start-ups to large listed entities across industries including media, technology, retail, lifestyle and engineering space. He also specialises in International Tax Structuring, R&D Tax reliefs and Video Games Tax reliefs.