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Importing from the UK - definitive guide (Q&A)
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Hard Brexit means a default to trade agreements with a non-EU country (i.e. VAT).
Soft Brexit will see negotiations required on any new trade agreements first, and until these are in place, existing agreements will remain.
That's how I see it but could be wrong.
Brexit is happening at 11pm Irish/UK time on 31st January, midnight Central European Time.
Under the proposed Withdrawal Agreement, the UK will more or less be treated as if it were a full member of the EU until at least the 31st December 2020.
This transitional period can be extended until either 31st December 2021 or 31st December 2022, but the UK has to make a request for an extension (either to 31/12/2021 or 31/12/2022) by 30th June 2020.
At present, the UK government says it will not request any extension, but it could change its mind...
After 31st December 2020/2021/2022 (depending on whether an extension request is made and for how long), the UK will not be treated more or less as an EU member state, and whether Brexit becomes 'soft' (UK membership of the Single Market, UK participation in a customs union with the EU) or 'hard' depends on what kind of trade agreement the UK negotiates with the EU.
At present, the UK government says it wants a 'hard' Brexit and doesn't want to stay in the Single Market or participate in a customs union with the EU, but it could change its mind...
The hardest of hard Brexits would be if there's no trade agreement of any kind between the UK and the EU after the Withdrawal Agreement transition period expires - there's no guarantee that the negotiations will be successful.
At present, the most likely outcome seems that the UK will not apply for an extension, and that it will leave the Single Market/Customs Union on 31st December 2020. This means hard Brexit from 31st December 2020.
I would rate the chances of a free trade deal being agreed between the UK and the EU by the end of this year as way less than 50%, although it could happen.
If it does, it's likely to be a very, very basic free trade agreement and any agreement to have 0% tariffs on goods imported from the UK into the EU might not cover all sectors fully(e.g. cars, including second-hand cars, might not be covered), or might only apply to a set amount of products in a certain sector (known as a tariff-rate quota: e.g. the UK and EU could agree that the first 100,000 cars (the quota) imported from the UK into the EU every year would be at 0% (the tariff-rate), and all other cars would have the existing 10% EU import tariff applied.
Even if there is some sort of agreement, UK-made car makers will have to prove that a certain percentage of the components they used to build the cars have been made in the UK for them to qualify for 0% tariffs/reduced tariffs/tariff-rate quotas once they've been imported into the EU.
The requirement for products made in one party to a free-trade agreement to have a certain percentage (to be agreed between the parties) of components/ingredients to be made in one of the countries that's party to the agreement is standard in free-trade agreements.
They are known as Rules of Origin and manufacturers who want to benefit from 0%/reduced tariffs/tariff-rate quotas have to prove that their products are made with at least the minimum percentage of components/ingredients from their home country as set out in the free-trade agreement.
Proving this costs money, and some smaller manufacturers don't bother to spend the money required to obtain the proof they need, so their products will be subject to the standard tariffs when imported...
Many UK-made cars don't have enough of their components made in the UK to qualify for any potential reductions if there's a UK-EU free-trade agreement.
They often are made with more components that have been made outside the UK than in the UK.
If that continues after Brexit, even with a free-trade agreement, they wouldn't qualify for any 0% tariff/reduced tariff/tariff-rate quota...
Basically, you're probably okay to continue importing cars, including second-hand ones, from the UK until at least the end of 2020, although you will probably have to pay Irish VAT on imports from the UK from 1st February onwards.
After that, who the hell knows!
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sondagefaux wrote: »Brexit is happening at 11pm Irish/UK time on 31st January, midnight Central European Time.
Under the proposed Withdrawal Agreement, the UK will more or less be treated as if it were a full member of the EU until at least the 31st December 2020.
This transitional period can be extended until either 31st December 2021 or 31st December 2022, but the UK has to make a request for an extension (either to 31/12/2021 or 31/12/2022) by 30th June 2020.
At present, the UK government says it will not request any extension, but it could change its mind...
After 31st December 2020/2021/2022 (depending on whether an extension request is made and for how long), the UK will not be treated more or less as an EU member state, and whether Brexit becomes 'soft' (UK membership of the Single Market, UK participation in a customs union with the EU) or 'hard' depends on what kind of trade agreement the UK negotiates with the EU.
At present, the UK government says it wants a 'hard' Brexit and doesn't want to stay in the Single Market or participate in a customs union with the EU, but it could change its mind...
The hardest of hard Brexits would be if there's no trade agreement of any kind between the UK and the EU after the Withdrawal Agreement transition period expires - there's no guarantee that the negotiations will be successful.
At present, the most likely outcome seems that the UK will not apply for an extension, and that it will leave the Single Market/Customs Union on 31st December 2020. This means hard Brexit from 31st December 2020.
I would rate the chances of a free trade deal being agreed between the UK and the EU by the end of this year as way less than 50%, although it could happen.
If it does, it's likely to be a very, very basic free trade agreement and any agreement to have 0% tariffs on goods imported from the UK into the EU might not cover all sectors fully(e.g. cars, including second-hand cars, might not be covered), or might only apply to a set amount of products in a certain sector (known as a tariff-rate quota: e.g. the UK and EU could agree that the first 100,000 cars (the quota) imported from the UK into the EU every year would be at 0% (the tariff-rate), and all other cars would have the existing 10% EU import tariff applied.
Even if there is some sort of agreement, UK-made car makers will have to prove that a certain percentage of the components they used to build the cars have been made in the UK for them to qualify for 0% tariffs/reduced tariffs/tariff-rate quotas once they've been imported into the EU.
The requirement for products made in one party to a free-trade agreement to have a certain percentage (to be agreed between the parties) of components/ingredients to be made in one of the countries that's party to the agreement is standard in free-trade agreements.
They are known as Rules of Origin and manufacturers who want to benefit from 0%/reduced tariffs/tariff-rate quotas have to prove that their products are made with at least the minimum percentage of components/ingredients from their home country as set out in the free-trade agreement.
Proving this costs money, and some smaller manufacturers don't bother to spend the money required to obtain the proof they need, so their products will be subject to the standard tariffs when imported...
Many UK-made cars don't have enough of their components made in the UK to qualify for any potential reductions if there's a UK-EU free-trade agreement.
They often are made with more components that have been made outside the UK than in the UK.
If that continues after Brexit, even with a free-trade agreement, they wouldn't qualify for any 0% tariff/reduced tariff/tariff-rate quota...
Basically, you're probably okay to continue importing cars, including second-hand ones, from the UK until at least the end of 2020, although you will probably have to pay Irish VAT on imports from the UK from 1st February onwards.
After that, who the hell knows!
a parallel would e#be the ckd cars once "built" here to avoid/satisfy the import regulations. A certain amount of local input was necessary0 -
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