Confirmed: 10% import tax on new cars from European Union

Government will switch to World Trade Organisation rules post-Brexit; tariff could change if deal is struck

Cars imported into the UK from European Union (EU) countries will be subject to a 10% import tariff from the start of next year, the UK government has confirmed. 

Revealed by the Department for International Trade as part of its wide-reaching announcement on the country’s post-Brexit trade tariffs, the default to World Trade Organisation (WTO) terms means cars built in the EU will be subject to the same tariff rate as cars from elsewhere in the world. 

Currently, there's zero import levy applied to EU-built cars. The 10% levy will apply unless the UK is able to strike a trade deal with the EU by the end of this year. 

The UK government sees tariffs on sectors such as the automotive industry as essential to “help support businesses in every region and nation in the UK to thrive”, including manufacturing. Jaguar Land Rover is one company that could benefit as prices of its dominant premium opposition from Germany are hiked up. 

It's unlikely that EU-based manufacturers will be able to absorb the additional cost, meaning it will be passed on to consumers in most cases. Porsche, for example, confirmed last year that its customers would have to pay 10% more for its models under a no-deal Brexit. 

Contrasting to the retained 10% levy on imported cars, the Secretary of of State for International Trade, Liz Truss, has actually reduced or removed current tariffs on a number of products, including dishwashers and freezers, cooking products, sanitary products and Christmas trees.

More than £30 billion worth of imports will have tariffs removed in total, the government claims.

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