VATLive > Blog > Europe > EU-UK Brexit preferential tariffs and rules of origin

EU-UK Brexit preferential tariffs and rules of origin

  • Jan 2, 2021 | Richard Asquith

The EU and UK have agreed a regime of nil or preferential customs duties (tariffs) for goods that comply with the 'rules of origin' from 1 January 2021 in their Trade and Cooperation Agreement. This means most goods imported between EU and UK are nil rated for customs duties. The goods must largely originate from the respective countries (rules of origin). Proof of the origin and claims in customs declarations must be made to support this. Importers must be also able to properly classify goods with UK and EU commodity codes. Failure to comply with this will mean EU or UK import tariffs will still apply. 

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To prevent goods from non-UK or non-EU countries benefiting from the EU-UK preferential tariffs, the manufacturing or processing of the goods in another third country must be very strictly limited. The Agreement only provides for 'bilateral' and not more generous 'diagonal' cumulation. There is a list of exact production requirements within the Agreement to be adhered to.

Contact Avalara for fully automated support on HS code identification and tariff calculations.

Transition on rules of origin until 31 December 2021

The rules below will be subject to a twelve-month transition phase until 31 December 2021. Importers do not need a supplier's statement of origination (see below), and may rely on ‘importer knowledge’. Importers must make every effort to obtain suppliers declarations retrospectively.

Small value €500 consignments threshold

Low value goods or consignments no exceeding €500 for personal use are exempt from the rules of origin requirements. This is extended to €1,200 for products within a traveller’s personal luggage.

Statement of Origin to qualify for preferential tariffs

To enjoy zero or preferential tariffs after Brexit, the importer will have to provide a statement they have documentary proof that the goods comply with the rules of origin. The wording of the statement is contained within the Trade and Cooperation Agreement. It should be included on the sales invoice or similar commercial document, including a description to identify the goods to enable identification. 

The statement can be provided by either:

  1. An exporter statement provided to the importer on the origin of the products to verify they originate from the EU or UK when the goods do not exceed €6,000 or £5,700. Above this limit, the EU exporter should first be registered with the EU Registered Exporter scheme (REX) and include their REX number in the statement. EORI numbers should be included. The UK will not use the REX scheme, and will be establishing a UK equivalent. 
  2. The importer’s own confirmation that the goods originated from the EU or UK based on ‘importer knowledge’. This should include supporting documents from the original producer or exporter to show and determine that the goods qualify as originating in the EU or UK.

For imports into the UK, where import declarations may be deferred until 1 July 2021, the declaration of proof of origin is included with the supplementary declaration.

How to claim preferential tariffs

A claim for preferential or zero tariffs is made in the customs declaration. For UK importers, this is done via CHIEFS or CDS systems. EU or UK claims may be made retrospectively for up to three years after the import.

Tariff rules on UK originated goods subsequently exported from EU

EU exporters of goods to other countries which have preferential tariff agreements will have to consider their supply chain plans. UK materials or processing of goods will not be considered as originating from the EU – ‘non-originating’. This means UK inputs into EU goods which are then exported may tip the goods into non-EU originating for tariffs to third countries.


VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He can be contacted at: richard.asquith@avalara.com. He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.
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