UK/EU. The recently struck Brexit transition agreement between the UK and EU means that a return to duty free sales between the UK and EU member states is likely to fall on 31 December 2020. Previously, it was considered that the UK’s planned exit on 31 March 2019 would signal the return of duty free sales in the UK to EU travellers.
Under the transition agreement, all current EU rules are likely to be followed until the period ends.
At a Brexit briefing today, the ETRC and industry lobbyist Hume Brophy outlined the latest developments. Crucially, whether the UK stays in a customs union with the EU or not, duty free sales to EU travellers can still return, as the UK will become a ‘third country’ upon departure from the Union.
The industry is now in a key period. The framework agreement between the UK and EU states is due to be finalised at October’s Council of Europe summit. Between now and then, industry stakeholders must convince the UK government and EU states to agree to a return of duty free sales.
Hume Brophy Managing Partner John Hume said: “The transition agreement reached between UK and EU is very clear: for the application of EU law, the UK should be treated an EU member state for duration of transition. That is scheduled to run March 2019 through to 31 December 2020. If there is no deal and a ‘hard Brexit’, the timeline would slip back to March 2019.
“We are working now on the basis that a transition period will be finalised, and that it will run to the end of December 2020. That will then mark the return of duty free. For that to happen, we need to convince the UK government and the EU 27 states that this is a good idea. The timeline for that is from now through to October this year.”
Industry representatives have been told by HMRC (Customs) in the UK that the issue will be dealt with as part of the framework agreement between the EU and UK.
Hume added: “We have strong support in the UK Parliament. That is having an impact and there are signs emerging that the government is well disposed towards a return to duty free, although it has yet to declare a position. But we are engaging strongly with government representatives.
“On the EU side, there are no hard and fast position taken yet. Our strategy is to focus on those countries with largest travel patterns to and from the UK, such as Ireland, France, Netherlands, Germany, Spain, Portugal and others.”
