One of the key benefits of the trade deal between the UK and EU is zero tariffs on qualifying goods. Specifically, if you trade between the UK and EU, you do not have to pay customs duties if you meet the Rules of Origin (RoO). That is, if you can show the goods in question originate in either the UK or EU.
However, as we’ve seen, meeting the Rules of Origin requirements is complex. Different rules apply to different products. Moreover, the way items are processed affects RoO.
Precisely because demonstrating Rules of Origin is so complex, businesses were given a one year grace period. From January 2022, demonstrating RoO are met will require considerably more paperwork.
It turns out Rules of Origin are not just complex in theory. Reports indicate that businesses are struggling to meet the RoO specifications. The Institute of Export & International Trade worries that complex rules of origin requirements “will simply be too confusing for many companies, who will stop exporting”.
Robust Rules of Origin planning for 2022
Businesses that trade between the UK and EU need an effective plan for 2022. They need to institute the processes to effectively demonstrate RoO and take advantage of zero duties on trade. Rules of Origin are complex, but trade specialists can effectively manage the process for you.
On the other hand, if a business cannot demonstrate RoO criteria have been met (if their goods do not meet the criteria or there is some administrative impediment to meeting the rules) then businesses need to plan accordingly. For instance, businesses may need to better manage cash flow and reduce the cost of importing by optimising import VAT and effectively maximising VAT reclaim opportunities.
A custom solution that makes importing simpler, faster and more affordable
re:TRADE, powered by VAT IT, is the world’s first integrated service that tackles all logistics, customs, VAT compliance processes, and refund mechanisms while charging zero upfront costs.
From Rules of Origin to Import VAT and beyond, re:TRADE’s experienced team will provide the strategic insights and on-the-ground assistance you need to trade under all conditions.