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Complex Rules of Origin add £600m to duty costs


Complex regulations surrounding Rules of Origin following Brexit has seen British businesses pay an additional £600m in customs duties in H1 this year. 

The UK’s trade agreement with the UK, which was geared towards removing tariffs for all goods, has actually seen costs related to export and import activity increase for a swathe of industries

Rules of Origin, which the UK government states are ‘some of the most important provisions that your business needs to understand and meet under the UK’s deal with the EU’, are still being adapted to by UK forms, with many saying they weren’t given enough time to fully understand the new regulations and trading conditions. 

Fergus McReynolds at Make UK commented that: “We didn’t actually see the black and white of the text until Christmas Eve, and that didn’t give companies a lot of time to understand the implications.”

One of the most notable examples of how Rules of Origin are impacting UK firms is Marks & Spencer’s ever-popular Percy Pigs. Although they are manufactured in Germany and then imported into the UK (a pathway which wouldn’t induce a charge under the primary trade agreement between the EU and the UK), the re-exporting of the product from the UK into Northern Ireland is now a step in the supply chain which is subject to import taxes with the tariff exemption falling away. 

Read more: ‘Disastrous drop’ in UK food and drink exports into the EU

Michelle Dale from accountancy firm Hacker Young noted that: “UK businesses weren’t given enough time or help to prepare for the cost of Brexit or the masses of paperwork.

“The result is that the cost of tariffs and extra paperwork is now causing serious difficulties for many businesses who are already struggling to stay profitable in the face of mounting pandemic-induced costs.”

Download our free Rules of Origin guide

If your business, like so many others, is still working to adapt to the new trading environment with the EU, we can help. 

Our free Rules of Origin guide and workbook has everything you need to work out what customs duties may be due on your products, with a step-by-step process through the rules in the TCA and a template for you to complete to calculator their origin. 

Download your copy here.

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