A report by the University of Sussex has found that around 10% of UK exports have unnecessarily paid tariffs since the start of the year.
The University’s Trade Policy Observatory analysed EU data to find that up to £3.5bn of British exports have paid tariffs which they didn’t need to. One reason given that exporters do not automatically benefit from zero tariffs.
Under Rules of Origin, tariffs apply on goods moving between the UK and EU only if the TCA’s Origin requirements are not met.
This has added work and a constant niggling headache for businesses as evidence of origin needs to be provided to avoid the tariffs, with the importer needing to declare that they hold any proof, and traders needing to understand how to classify their goods to cross-check against specific product rules.
As Prof Michael Gasiorek of the Univesity of Sussex summarised, “tariff-free trade is only tariff-free if firms not only meet the Rules of Origin criteria but also can deal with the necessary bureaucracy and paperwork”. Businesses have since told the BBC that they’ve paid millions in tariffs due to complex arrangements for claiming zero tariffs, complications over re-exporting goods and also an expectation that some fees could be recovered in the future.
It’s estimated that UK exports into the EU have dropped 15% compared to last year, whilst imports have fallen 32%.
If your business has faced tariffs and is struggling to get to grips with Rules of Origin, download our free guide and workbook here.