A new UK global tariff which is set to replace the current EU Common External Tariff could provide a much-needed boost to the UK hospitality sector, according to the latest market insight from Regency Group.
The new tariff, which will come into effect from 1st January 2021, will apply to all goods imported into the UK unless an exception applies. Potential exceptions could include a relief or tariff suspension, goods coming 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.
Alex Demetriou, managing director of Regency Group, commented: “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.
“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.”
“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.”
Demetriou continued: “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.”