To ask Her Majesty's Government what steps they are taking to provide clarification to small businesses on the rules of origin for duty free trade with the EU.
Answered on
19 July 2021
The UK-EU Trade and Cooperation Agreement (TCA) ensures there will be zero tariffs or quotas on trade between the UK and the EU, where goods meet the relevant rules of origin. Rules of origin are a standard feature in all free trade agreements and the Government worked closely with industry throughout negotiations with the EU to ensure that the vast majority of trade will benefit from zero tariffs.
Overall, businesses have been adjusting well to the new rules and continue to trade effectively. The Government appreciates that increasing business understanding of the rules is a key factor in facilitating tariff-free trade.
Accordingly, to support all businesses, the Government has published extensive guidance on the rules of origin requirements under the TCA, and is regularly updating GOV.UK based on industry feedback. The Government continues to engage extensively with industry stakeholders and business organisations across all sectors to provide general support, raise awareness of the rules and help identify and resolve various sector specific issues.
Furthermore, to simplify the adherence process for traders, the Government has temporarily suspended some rules of origin requirements in 2021. We have agreed with the EU that until 31 December 2021, for both goods imported from the EU to the UK and vice versa, traders do not need supplier declarations from business suppliers to be in place at the time the goods are exported. These easements give businesses extra time to make the necessary adjustments to evidence their claims for preference.
The TCA also establishes a Specialised Committee on Customs and Rules of Origin, through which we can work with the EU to resolve implementation issues. UK officials are currently working closely with their EU counterparts to ensure the TCA is implemented in full, including that duties are not applied to goods that meet the rules of origin requirements in the TCA.
The Government also supported small businesses through the £20m SME Brexit Fund. The fund was announced on 11 February this year, to give small and medium businesses who trade only with the EU up to £2,000 towards training and/or professional advice to help them adapt. It was well publicised that applications to the scheme would close on 30 June.
The SME fund was just one form of support; HMRC’s Customs Grant Scheme paid out over £69 million. But these schemes are finite. HMRC continues to support businesses through regular engagement, and the Government will continue to monitor the impacts of rules of origin and review the support available to businesses.