Top tips on rules of origin: how to claim zero tariffs on your imports and exports
If you buy goods from the EU or send or sell goods to the EU for your business, you need to know about rules of origin. UK goods exported to the EU, and EU goods imported to the UK are eligible for zero tariffs, if the goods meet the rules of origin requirements set out in the UK’s trade agreement with the EU and have the right documentation.
In this email we’ll cover the following questions:
1. What do the zero tariffs in the UK’s trade agreement with the EU mean for businesses?
2. What are rules of origin and what do we mean by ‘origin of goods’?
3. How do I find out if I can claim a zero-tariff on my goods?
4. If I import goods into the UK from the EU and want to re-export them back to the EU, will tariffs apply?
5. Support and guidance for businesses
Question 1: What do the zero tariffs in the UK’s trade agreement with the EU mean for businesses?
On 1 January 2021, the UK left the EU Customs Union and moved to trading based on a new Free Trade Agreement (FTA) between the UK and the EU – the Trade and Cooperation Agreement (TCA). To protect UK and EU businesses, the TCA includes preferential zero tariffs that only apply to goods produced in the UK or the EU.
This means that you do not need to pay Customs Duty if you:
- buy goods that originate in the EU and bring them into the UK
- sell or send goods that originate in the UK to the EU.
To claim preference and benefit from zero tariffs, your goods must meet the rules of origin requirements in the TCA and you will need to provide documentation to prove this. The rules of origin in the TCA ensure that only goods produced or manufactured in the UK or EU benefit from the zero-tariff agreement.
The usual rules for VAT on goods imported into the UK still apply, even if your goods originate in the EU and are eligible for zero tariffs. You can find more information about how VAT is charged on imports on GOV.UK.
Question 2: What are rules of origin and what do we mean by ‘origin’ of goods?
Rules of origin are a standard part of free trade agreements (FTAs) that are used to determine the country of origin of the goods in question. By ‘origin’ we mean where goods (or the materials, parts or ingredients used to make them) have been produced or manufactured. It is not where they have been shipped or bought from.
The purpose of rules of origin is to ensure that only goods produced or manufactured in the countries that are part of the trading agreement in question benefit from preferential tariffs.
Rules of origin are not the same for all types of goods. Different kinds of goods face different rules and specifications, called product-specific rules, so you need to check the individual rules for your goods. Please see the answer to question 3 for more information on how to check the rules of origin for your goods.
Question 3: How do I find out if I can claim a zero-tariff on my goods?
To find out if you can claim a zero tariff when you move your goods into the UK from the EU or into the EU from the UK, you must follow these 3 steps:
Step 1: Classify your goods by finding the correct commodity code
Commodity codes are used to classify goods that are imported and exported so that traders can:
- fill in customs declarations and other paperwork
- check if there is duty or VAT to pay
- find out about duty relief.
Each commodity code is made up of a number of different parts, based on:
- the type of product
- the material used to make it
- the production method.
You can use the trade tariff tool to find the commodity code for your goods.
There’s more information on classifying goods, including where to get help if you need it, on GOV.UK.
Step 2: Check if your goods meet the rules of origin
Before you can check the rules of origin for your goods, you need to understand your supply chain to know where your materials or parts come from – whether they originate in the UK or EU, or anywhere else in the world. Parts or materials that don’t originate from the UK or EU in accordance with the TCA are considered non-originating.
Once you have classified your goods, you can use these tools on GOV.UK to find product-specific rules for the goods you’re importing into the UK or exporting from the UK.
Step 3: Get proof that your goods meet the rules of origin
To claim zero tariffs, businesses will need to provide proof that their goods comply with the rules of origin. This can be either through:
- a statement of origin provided by the seller (exporter)
- evidence the importing business has obtained (known as ‘importer’s knowledge’) that demonstrates how the goods meet the product-specific rules and originate in the EU (as the exporting country).
Until 31 December 2021, if you’re claiming preference for goods imported from or to the EU on the basis of the importer’s knowledge or making out a statement on origin, you do not need to hold a supplier’s declaration at the time you’re claiming. As the importer, you must be confident that the goods meet the rules of origin and make every effort to get suppliers declarations retrospectively. You can find more information about the proof you need to provide and how to claim the preferential tariffs on GOV.UK.
You do not need proof of origin if you import any goods into the UK from the EU with a total value of £1,000 or less. Goods valued below this threshold still need to be originating and meet rules of origin to be eligible for preferential zero tariffs, but businesses will not need to provide proof of origin documentation. If the total value of the goods you’re importing into the UK exceeds this threshold, you will need to provide proof of origin documentation in order to claim preferential zero tariffs.
No customs duty is charged on goods imported into the UK that have a total value below £135.
Proof of origin is required for all commercially-traded goods that you send from the UK to a business or customer in the EU, regardless of their value.
Question 4: If I import goods into the UK from the EU and want to re-export them back to the EU, will tariffs apply?
If you bring goods into the UK from the EU and then want to send or sell them back to the EU, tariffs may apply when you export them back to the EU. This means that the person or business receiving the goods in the EU may need to pay customs duty.
Whether or not tariffs will apply when the goods are re-exported to the EU will depend on whether:
- the goods originated in the EU
- you’ve altered or substantially processed the goods in the UK to turn them into a product with UK origin.
If your goods are not eligible for preferential zero tariffs but the goods had been in free circulation in the EU at the time they were exported to the UK, the person or business receiving the goods back in the EU (the importer) may be able to claim Returned Goods Relief (RGR) in the EU instead. RGR provides relief from charges on re-imported goods into the EU that have previously been exported, provided they meet the necessary conditions.
You’ll need to get guidance on RGR into the EU from the customs authority of the EU country that you export your goods to. You can find more information on the Europa website.
You can use our online tool to help you check the rules for the goods you want to re-export to the EU.
Support and guidance for businesses
We have a range of support, online guidance and tutorials available to help you adapt to new rules for trade with the EU. Here’s some of the support that’s available for you.
SME Brexit Support Fund
Small and medium-sized businesses (SMEs) can get up to £2,000 through the new SME Brexit Support Fund, to pay for practical support, including training or professional advice to adjust to new customs, rules of origin and VAT rules when trading with the EU.
YouTube videos
Watch our short videos on HMRC’s YouTube channel to familiarise yourself with customs processes and what you need to do before trading goods with the EU.
Live webinars
We’re delivering daily webinars including:
- Customs Import Declarations: An overview
- Exporting: what you need to do to keep your goods moving
- Importing: what you need to know about Staged Controls
- Trader responsibilities when using an intermediary.
If you’d like to attend a webinar you can register here.
Check out our forums
To ask and get answers to specific questions about HMRC processes for importing or exporting, please visit our customer forums.