European-built cars imported to the UK from 2021 are set to become around £1,500 more expensive after the government confirmed that these vehicles would be subject to a 10 per cent tariff from 1 January.
The Department for International Trade today announced its post-Brexit tariff regime, which will see cars built in EU countries subject to the same 10 per cent levy as those arriving from other nations.
The move would hit some of Britain's most popular cars, including best sellers like the Ford Fiesta, VW Golf and Mercedes-Benz A-Class.
This will be the case unless the Government negotiates a free trade agreement (FTA) with the EU between now and the end of the Brexit transition period, which is due to terminate on 31 December 2020.
Failure to secure an FTA means the UK will default to World Trade Organisation (WTO) terms on 1 January 2021, according to the UK Global Tariff document published on Tuesday,
This will end the zero per cent tariff on cars imported from EU nations and replace it with a 10 per cent levy.
Experts have already warned that in most cases the additional cost of tariffs will likely be passed on to British car buyers rather than absorbed by the manufacturers themselves.