TCA UK-EU — How to Avoid Duty Through Rules of Origin

What is the TCA and When Does It Provide Zero Tariff?

The Trade and Cooperation Agreement (TCA) is the trade agreement concluded between the United Kingdom and the European Union, in force from 1 January 2021. Its key benefit is zero tariffs on goods in bilateral trade — both for exports from the EU to the UK and from the UK to the EU.

However, zero tariffs are not automatic. HMRC and EU customs authorities require proof that the goods have preferential EU origin (exports to the UK) or preferential UK origin (imports from the UK). Without the correct documentation, standard tariff rates from the Integrated Tariff of the United Kingdom (UK Global Tariff) apply — which for many product categories range from a few to several tens of percent of the goods' value.

Rules of Origin — What Does It Mean for Goods to "Originate" in the EU?

Simply manufacturing, packaging, or storing goods in Poland does not automatically guarantee EU customs origin. EU customs rules (also applied under the TCA) require one of two criteria to be satisfied:

1. Wholly Obtained (WO) — Goods Entirely Obtained in the EU

This applies to goods that are exclusively the product of the EU, containing no materials from outside the EU. Examples: agricultural products grown in Poland, fish caught by vessels flying an EU flag, minerals extracted from European deposits. In industrial trade, the WO criterion is rarely applicable.

2. Sufficient Processing (SP) — Sufficiently Transformed

For most industrial goods, the Sufficient Processing criterion applies — goods manufactured from non-EU materials or components must undergo sufficient transformation to acquire EU origin. The specific requirements are set out in the Product Specific Rules (PSR).

PSR — Product Specific Rules, One Rule Per CN Code

The TCA contains Annex ORIG-2 with a list of Product Specific Rules — a separate sufficient processing rule for each HS/CN code. The most commonly encountered PSR types are:

How to check the PSR for your goods? Visit the UK Trade Tariff or the EU TARIC database, enter the CN code, and check Annex ORIG-2 of the TCA.

How to Prove Origin — Documents

For Exports from the EU to the UK — Statement on Origin

The main document confirming preferential EU origin when exporting to the UK is the Statement on Origin placed on the commercial invoice, packing list, or another commercial document.

Wording of the statement:

"The exporter of the products covered by this document (Exporter Reference No …) declares that, except where otherwise clearly indicated, these products are of … preferential origin."

Requirements:

• The exporter must be registered in the REX system (Registered Exporter System) on the EU side — for shipments with a preferential value above €6,000.
• For shipments up to €6,000, any exporter may provide a Statement on Origin without REX registration.
• The exporter's REX number must be included in the statement.

Supplier Declaration — for Multi-Tier Supply Chains

Where the exporter is not the direct manufacturer of the goods, they must obtain a Supplier Declaration from their supplier. This document confirms that the components or materials purchased from the supplier satisfy the PSR rules or have preferential EU origin status.

A Supplier Declaration may be issued per invoice or as a Long-term Supplier Declaration valid for up to two years for regular supplies of the same goods.

Common Mistakes When Claiming TCA Preferences

Mistake 1: Confusing Country of Dispatch with Country of Origin

Goods manufactured in China, warehoused and repacked in Poland, then shipped to the UK — do not have EU preferential origin. Packing, repacking, and storage are not considered sufficient processing. The UK importer will have to pay the standard tariff rate.

Mistake 2: Not Registering for REX on Shipments Exceeding €6,000

Exporters regularly sending goods worth more than €6,000 to the UK must be registered in the REX system. Without a REX number, the Statement on Origin on the invoice is invalid — HMRC will refuse the preference claim.

Mistake 3: Inadequate Description of Goods on the Invoice

The description must be sufficiently detailed to allow unambiguous tariff classification and verification of the PSR rule. A description such as "parts and accessories" instead of "aluminium bicycle frames HS 8714.91" may result in the preference being refused.

Mistake 4: Missing Supplier Declaration Where Multiple Source Materials Are Used

A manufacturer using components from several suppliers must collect Supplier Declarations from each of them before issuing a Statement on Origin on the export invoice. A single missing declaration can undermine the entire PSR calculation.

Cumulation — Flexibility in the TCA Rules

The TCA introduces bilateral cumulation between the UK and the EU. This means that materials or processing on both sides (both in the UK and the EU) may be combined when calculating the degree of processing. Example: a manufacturer in Poland imports steel components from the UK and assembles them into finished products — the steel produced in the UK may be counted as "EU/UK material" when assessing the PSR rule for the finished product being exported back to the UK.

Verification and Duty Repayment

If an importer has paid standard duty (without applying TCA preferences), they may submit a Repayment claim to HMRC within three years of the customs declaration date, providing retrospective proof of origin. The process is time-consuming but worthwhile for high-value goods.

Official Sources

• GOV.UK: Trading under the UK-EU TCA — HMRC, 2026
• EU Commission: EU-UK preferential origin rules — European Commission, 2026
• GOV.UK: Claim preferential tariff rates on exports to EU — HMRC, 2026

Frequently Asked Questions (FAQ)

What is the TCA and what does it mean for exporters?

The TCA (Trade and Cooperation Agreement) is the trade agreement between the UK and the EU, in force from 1 January 2021. For exporters, it means the ability to export goods to the UK without paying duty — provided the rules of origin are satisfied. Without the TCA, standard UK Global Tariff rates would apply, such as 12% for clothing, 6.5% for plastic furniture, and 4% for leather footwear.

When does a product qualify for zero tariff under the TCA?

A product qualifies for zero tariff under the TCA when: (1) it has preferential EU or UK customs origin, i.e. it satisfies the Product Specific Rules (PSR) contained in Annex ORIG-2 of the TCA; and (2) the exporter has included a valid proof of origin (Statement on Origin on the invoice or an equivalent document). Simply manufacturing or warehousing goods in the EU is not sufficient — the specific PSR for the relevant tariff code must be met.

How do you prove preferential origin of goods?

The primary proof is a Statement on Origin placed on the commercial invoice or another commercial document. For shipments above €6,000, the exporter must be registered in the REX (Registered Exporter System) and include their REX number in the statement. For shipments up to €6,000, a statement without a REX number is sufficient. Alternatively, a traditional EUR.1 movement certificate issued by the customs authority may be used, although a Statement on Origin is simpler and free of charge.

What are Product Specific Rules (PSR)?

PSR (Product Specific Rules) are the detailed processing requirements a product must meet in order to acquire preferential origin under the TCA. Each HS/CN code has its own PSR. The most common types are: CTH (change of tariff heading), MaxNOM (maximum share of non-originating materials in the ex-works value), and CC (change of tariff chapter). The PSR are contained in Annex ORIG-2 of the TCA.

What mistakes cost exporters their TCA preferences?

The most common mistakes are: (1) confusing country of dispatch with country of manufacture — goods produced in Asia and merely repacked in Poland do not have EU origin; (2) not registering for REX on shipments exceeding €6,000; (3) an inadequate or overly vague description of goods on the invoice; (4) missing Supplier Declarations from component suppliers. Each of these mistakes may result in the preference being refused and standard duty being charged by HMRC or the EU customs authority.