From 1 January 2021, if no trade agreement exists between the UK and another country, trade with that country will take place under World Trade Organisation (WTO) rules.
This will affect all UK businesses in one way or another so its vital that you prepare accordingly in the event that the UK begins trading under WTO rules.
So what will you have to do differently when you are trading under WTO rules?
Customs procedures and declarations
From 1 January 2021, you will still be required to complete customs procedures and declarations for imports to the UK.
Goods in transit
When goods are being transported, they will pay the tariff at the rate on the day that they are imported into the UK. From 1 January 2021, the UK Global Tariff will apply to imports into the UK unless a preferential agreement like an FTA applies. The MFN tariff of the country of destination will apply to exports from the UK, unless the UK has preferential trading arrangements in place with that country.
At the end of 2020, the UK will transition to WTO terms with all those nations it doesn’t have a preferential trade agreement with.
Establish the UK origin of your goods for tariff purposes
From 1 January 2021, how you establish the origin of your goods for tariff purposes may change. The UK and the EU will be separate territories for rules of origin purposes.
Trade under WTO rules does not require you to prove preferential origin.
Non-preferential rules of origin
When trading with countries with whom the UK does not have a trade agreement, non-preferential rules of origin will apply from 1 January 2021.
This means that when you are importing a good you will need to declare the origin of your goods. If you are exporting, you will need to apply the non-preferential rules of origin as set by the destination country.
If required, you will be able to apply for a non-preferential certificate of origin from the British Chambers of Commerce.
Paying tariffs on imports into the UK
From 1 January 2021, the tariffs you pay may be different. We have introduced the UK Global Tariff policy on MFN imports into the UK, which will enter in force from 1 January 2021.
Find out what tariff rates apply to specific goods imported into the UK from 1 January 2021.
Paying tariffs on exports from the UK
Overseas importers may need to pay different tariff rates on exports from the UK. The tariffs will vary by country and product. Many are duty free under WTO terms.
Find out what tariff rates apply in every country.
There are of course many other WTO rules that will apply to the UK in the event that an agreement is not made before the 1st January 2021. You can read the full UK Government guidance here: