Brexit has been somewhat side-lined in recent months with the Covid-19 pandemic dominating, however, with several notable changes coming into force in the coming months, companies need to plan and prepare for how these could affect their businesses.
One such change is the UK Global Tariff (UKGT), which will apply from 1st January 2021, replacing the current EU Common External Tariff.
This tariff will apply to all goods imported in to the UK unless an exception applies, such as a relief or tariff suspension, the goods come from countries that are part of the Generalised scheme of preferences (GSP) where trade preferences reduce or remove rates of duty or tariffs from developing countries, or the country from where the goods are being imported has a trade agreement with the UK.
The Managing Director of one of the UK’s leading procurement companies, Regency Purchasing Group, welcomes news of the new tariff and believes it could provide a much needed boost for leisure and hospitality businesses.
Alex Demetriou comments: “Based upon what has been published by HMRC to date, the UKGT actually looks favourable and not detrimental to product categories. In fact, there is simplification, and reductions rather than the increases that were creating a significant amount of concern.
“If we take a couple of examples, for strawberries, the current CET (Common External Tariff) Duty Rate is 11.20% on imports from 1st January – 31st April and 1st August – 31st December, and 12.8% (minimum €2.4 / 100kg/ net) from 1st May – 31st July. Under the new UKGT, this is moving to a straight 10%, so has been simplified.
“Also motor vehicles for the transport of goods (commodity code 8704 21 31 less than 5 tonnes with a cylinder capacity of greater than 2.500 cm3) has moved from a 22% duty rate to 10% duty rate. This will be welcome news to the hospitality sectors wholesalers as they look to upgrade their fleet in the future.”
These savings will provide a lifeline to leisure and hospitality businesses, who have been hit hard by the imposed lockdown measures of the last three months.
Alex continues: “The government could use the new UKGT as one of the key tools in helping leisure and hospitality businesses to survive. The work the government is in the process of undertaking on tariffs could be an integral part in both protecting UK producers (and that part of the economy), as well as leisure and hospitality businesses who are importing wines, olive oils, fruits, vegetables etc from all over the globe.
“The new tariffs, alongside the recent VAT cut and Eat Out to Help Out scheme will make a big difference to businesses in the sector and it would be great to see the government introducing such measures. I think the new tariffs could certainly help leisure and hospitality businesses, which in turn, will also help individuals by reducing their grocery shopping costs. Now is the perfect time to offer this boost to households and businesses.”
Regency Purchasing Group services more than 3,000 leisure businesses across the UK, including golf clubs, hotels, pubs, zoos and other attractions and specialises in sourcing produce from various markets, locally, regionally, nationally and internationally.