Get ready immediately for new UK EU rules of origin

Welcome to 2021, a year where we are still in the darkest hours of a pandemic and everything has changed regarding trade with the EU and that is despite a much heralded Free Trade Agreement being finally struck almost 4 and a half years after the UK voted to leave the EU and just days before we actually left. It was squeaky bum time as it only receiving Royal Assent in the early hours of the 31st of December 2020 before coming into effect at 11pm GMT later that same day. However there is one thing you really really need to be aware of and that’s a little clause known as rules of origin.

Everyone has been welcoming the Free Trade Agreement between the UK and EU with a sigh of relief, assuming that the only thing that stands in the way of selling across the border is paperwork. However the UK and EU agreement sets out rules of origin which effectively means that many products you sell could still be subject to tariffs.

For goods to be covered under the free trade agreement they need to be wholly obtained within either the UK or EU or substantially transformed. That means for UK sellers, your goods need to be either Made In Britain or if using materials from outside the UK or EU then they need to be worked to create a new product – effectively what counts is does it change the HS Code for which the tariffs apply. If the HS code doesn’t change then tariffs are likely to still apply and that could be a problem for many who order in from overseas and effectively then box shift from the UK.

There is a bit of leeway until the 31st of December 2021, in that you don’t have to have your rules of origin paperwork in place at the time of export before then. However that doesn’t mean you won’t still potentially have tariffs to pay if your products don’t qualify as defined by the Free Trade Agreement. Even if you don’t do the paperwork, check immediately on how your products will be classified to ensure that bills down the line don’t wipe out profits and result in selling at a loss.

You can download the The Trade and Cooperation Agreement (TCA): detailed guidance on the rules of origin here.

We understand that the Brexit changes that came into force on the 1st of January are going to be disruptive to your business, so to get a fuller overview once carriers and postal networks get themselves sorted and exporting again, we are holding a webinar on the 27th of January to run through everything you need to know. Sign up here to reserve your spot.

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