If you import goods into the UK from developing countries, you may be able to pay less, or even zero, import duty. The UK’s Developing Countries Trading Scheme (DCTS) makes this possible. It replaced the old UK rollover of the EU’s Generalised System of Preferences (GSP) in 2023 and is now one of the most generous trade preference schemes in the world.
This article explains how it all works, what you need to do to claim it, and what happens if you get it wrong.
Generalised System of Preferences (GSP): A unilateral trade arrangement where a developed country grants reduced or zero import tariffs to goods coming from developing countries, without requiring anything in return.
GSP is not a trade deal. Unlike a Free Trade Agreement, it does not need to be negotiated with the beneficiary country. The developed country simply decides to offer the preference, and eligible exporters can take advantage of it.
The World Trade Organization (WTO) permits these one-sided preferences under what is known as the Enabling Clause. Most major economies operate some form of GSP: the US, EU, Japan, and the UK are all examples.
The UK had its own version of GSP since it rolled over the EU scheme after Brexit. In 2023, the UK went further and launched the DCTS, its own independent scheme built for developing nations.
The Developing Countries Trading Scheme (DCTS) is the UK’s current preferential tariff programme for developing and least developed countries. It came into force on 19 June 2023.
The DCTS is designed to support economic growth in developing nations by giving their exporters better access to the UK market. In practical terms, it means UK importers pay lower, sometimes zero, import duty when buying goods from DCTS-eligible countries.
The scheme covers over 65 countries across sub-Saharan Africa, South Asia, Southeast Asia, and the Pacific. It is managed by the UK’s Department for Business and Trade.
To benefit, three things must be true:
After Brexit, the UK initially rolled over the EU’s GSP almost unchanged. That meant UK importers were working under a scheme designed for EU priorities, not UK ones.
The 2023 DCTS replaced that rollover with something built from scratch. The key differences are:
More generous duty reductions. The DCTS cut tariffs further than the old EU-rollover scheme, particularly for textile and agricultural products from least developed countries.
Simpler rules of origin. The DCTS relaxed some of the origin requirements that made it difficult for small exporters to qualify. This is especially relevant for garments and processed foods.
Broader country coverage. Some countries that were not covered, or were only partially covered, under the old UK GSP are now included in the DCTS.
Three clearer tiers. The DCTS organises countries into three preference levels, each with its own duty rates and conditions. The old GSP had a similar structure, but the DCTS tiers are more clearly defined.
In short: the DCTS is a more generous and more accessible scheme than what came before it.
The DCTS divides eligible countries into three tiers. Each tier has different duty rates and eligibility criteria.
| Tier | Full Name | Who Qualifies | Duty Rate on Most Goods |
|---|---|---|---|
| LDTS | Least Developed Countries Framework | Countries on the UN’s list of Least Developed Countries (LDCs) | 0% on essentially all goods |
| GPS | General Preferences Framework | Developing countries not in LDTS or Enhanced | Reduced, but not zero |
| Enhanced | Enhanced Preferences Framework | Countries committed to labour, human rights, and environmental standards | Further reductions beyond GPS |
This is the most generous tier. Countries classified as LDCs by the United Nations get zero duty on almost all goods imported into the UK. There are very few exceptions.
Examples of LDTS countries: Bangladesh, Cambodia, Ethiopia, Myanmar, Tanzania, Uganda, Mozambique, Senegal.
Countries in the GPS tier get reduced duty rates, but not necessarily zero. The exact rate depends on the commodity code of the goods.
This tier covers developing countries that do not meet the UN’s LDC classification and have not qualified for Enhanced preferences.
Countries in the Enhanced tier get better rates than GPS but may not reach the zero-duty level of LDTS. To qualify for this tier, a country must meet benchmarks on labour rights, environmental protection, good governance, and anti-corruption measures.
Examples of Enhanced tier countries: Ghana, Pakistan, Sri Lanka, Kenya, Ivory Coast.
Not all goods from DCTS-eligible countries automatically attract a lower duty rate. Each product has its own preferential rate listed in the UK Global Tariff.
To find out if your goods qualify:
Some goods are excluded from DCTS preferences regardless of origin. These include certain arms and ammunition, and a small number of sensitive agricultural products.
For most manufactured goods, textiles, garments, and agricultural products from least developed countries, the DCTS rate is 0%.
Rules of origin are the conditions a product must meet to be considered “from” a particular country. If the rules are not met, you cannot claim the preferential rate, even if the goods were shipped from an eligible country.
Under the DCTS, there are two main origin rules:
Wholly got: The goods were entirely produced in the beneficiary country. This applies to agricultural produce, fish caught in that country’s waters, and minerals extracted there.
Enough processing: The goods were produced using materials from other countries, but enough work was done in the beneficiary country to give them a new character. What counts as “enough” varies by product and is set out in the DCTS product-specific rules.
The DCTS allows a degree of cumulation. This means materials from certain other countries can be treated as if they originated in the exporting country. It makes it easier to qualify. For example, a garment made in Bangladesh using fabric from another LDC country can still qualify as originating in Bangladesh.
Extended cumulation is also permitted in some cases, allowing inputs from UK trading partners to count toward origin.
Always ask your supplier for proof of origin before the shipment arrives. If your supplier cannot provide valid origin evidence, HMRC can refuse the preference claim and charge you the full duty rate, plus interest.
Claiming DCTS preferences is part of the customs declaration process. Here is how it works step by step.
Step 1: Confirm eligibility. Check that the exporting country is on the DCTS eligible list and that your specific goods have a preferential rate under that country’s tier.
Step 2: Get proof of origin. Ask your supplier for either a GSP Form A (also called a Certificate of Origin Form A) or a REX statement. More on these in the next section.
Step 3: Declare the preference on your import entry. When your customs agent or freight forwarder submits the import declaration in the Customs Declaration Service (CDS), they must include the correct preference code. This tells HMRC you are claiming a DCTS preferential rate.
Step 4: Keep your records. HMRC can request proof of your preference claim for up to four years. Keep copies of your Form A or REX statement, the commercial invoice, packing list, and any other supporting documents.
If HMRC audits your preference claims and finds they were made without valid evidence, they will issue a demand for the unpaid duty, along with interest and potentially a penalty.
There are two accepted ways for a supplier to prove that goods originate in a DCTS-eligible country.
Form A is a paper certificate issued by the customs authority or approved body in the exporting country. It certifies that the goods meet the origin rules and qualify for preferential treatment.
Key points about Form A:
Form A is the traditional method and is still widely used, particularly by smaller exporters.
REX is a more modern, self-certification system. Under REX, an exporter registers with their national authority and receives a REX number. They can then make a statement of origin on their commercial invoice or other commercial document. No separate certificate is needed.
A REX statement looks something like this on the supplier’s invoice:
“The exporter of the products covered by this document declares that, except where otherwise clearly showed, these products are of [country] preferential origin.”
REX statements can cover multiple shipments over a period of time (usually up to 12 months), which makes them much more efficient for ongoing supplier relationships.
Which should you use? For established suppliers with regular shipments, REX is more practical. For one-off or occasional orders from smaller suppliers, Form A may be easier to get.
Before Brexit, UK importers benefited from the EU’s GSP automatically. It applied to all EU member states. After leaving the EU on 31 January 2020, the UK needed its own preferential tariff scheme.
Initially, the UK simply rolled over the EU scheme. That worked as a temporary measure, but it meant the UK was operating a scheme designed for EU interests. The UK had no say in how it was structured.
The DCTS, launched in 2023, represents the UK’s first fully independent preferential trade policy. It reflects UK priorities: deepening trade ties with Commonwealth nations, supporting the UN Sustainable Development Goals, and giving UK importers access to lower-cost goods from developing markets.
One important difference from the EU scheme: some countries’ eligibility differs. Countries that were graduated out of the EU GSP (because they became too wealthy or signed FTAs with the EU) may still be eligible under the UK DCTS, and vice versa. Always check the current UK DCTS country list rather than assuming EU GSP rules apply.
The UK also retains the right to suspend or withdraw DCTS preferences if a country fails to meet governance, human rights, or labour standards. This has happened in the past under the old GSP and could happen under DCTS.
The DCTS covers over 65 countries. Here is a selection of well-known eligible countries and their tier at the time of writing:
LDTS (Least Developed Countries Framework):
Bangladesh, Cambodia, Ethiopia, Myanmar, Tanzania, Uganda, Mozambique, Senegal, Nepal, Malawi, Mali, Niger, Rwanda, Sierra Leone, Somalia, South Sudan, Sudan, Togo, Zambia, Afghanistan, Burkina Faso, Burundi, Central African Republic, Chad, Democratic Republic of Congo, Djibouti, Eritrea, The Gambia, Guinea, Guinea-Bissau, Haiti, Kiribati, Laos, Lesotho, Liberia, Madagascar, Mauritania, São Tomé and Príncipe, Solomon Islands, Timor-Leste, Tuvalu, Vanuatu, Yemen.
GPS (General Preferences Framework):
Bolivia, Cape Verde, Congo, Cook Islands, Egypt, El Salvador, Eswatini, Honduras, India, Indonesia, Jordan, Mongolia, Morocco, Namibia, Nicaragua, Nigeria, Philippines, South Africa, Tunisia, Ukraine, Vietnam, Zimbabwe.
Enhanced Preferences Framework:
Cameroon, Côte d’Ivoire (Ivory Coast), Ghana, Kenya, Pakistan, Sri Lanka.
Note: This list is subject to change. Always verify against the official UK Government DCTS eligible country list before making a claim.
New importers make the same errors again and again. Here are the most common ones to avoid.
1. Assuming all goods from an eligible country are duty-free.
The country must be eligible AND the specific commodity code must have a preferential rate under DCTS. Some goods are excluded.
2. Forgetting to get proof of origin before the goods arrive.
You cannot get a valid Form A after the shipment has cleared customs. If your supplier did not provide one, you will pay full duty.
3. Using an expired or incorrectly completed Form A.
A Form A issued more than 10 months before presentation, or that has missing fields, will be rejected by HMRC.
4. Not checking whether the goods meet the rules of origin.
Just because goods were shipped from Bangladesh does not mean they originate in Bangladesh. If the materials and processing do not meet the rules, the preference cannot be claimed.
5. Applying EU GSP rules instead of UK DCTS rules.
Post-Brexit, the UK and EU schemes differ. Some origin rules, country eligibility, and cumulation provisions are not the same. Always use the UK DCTS rules.
6. Failing to keep records.
HMRC can audit preference claims up to four years after the import. If you cannot produce the origin evidence, you will be liable for the duty.
Jamie works as a shipping co-ordinator for a UK clothing retailer. The company imports cotton T-shirts from Bangladesh: 5,000 units at £4 each, so a total customs value of £20,000.
The standard (MFN) duty rate for cotton T-shirts under UK tariff is 12%. Without any preference, the company would pay:
£20,000 × 12% = £2,400 in import duty
Bangladesh is in the LDTS tier of the UK DCTS. Cotton T-shirts from least developed countries attract a 0% DCTS rate.
Jamie’s company provides the customs agent with a valid REX statement from the Bangladeshi supplier. The customs agent enters the DCTS preference code on the import declaration.
The duty bill: £0.
That is a saving of £2,400 on a single shipment. On a company importing 20 shipments a year of similar value, that adds up to £48,000 in annual duty savings, money that goes back into the business rather than to HMRC.
The only requirement: the T-shirts must genuinely originate in Bangladesh (i.e., the fabric was cut and sewn there), and the REX statement must be valid and correctly worded.
Q: Is GSP the same as DCTS?
Not exactly. GSP (Generalised System of Preferences) is the global term for this type of preferential trade scheme. The UK DCTS is the UK’s specific version of GSP. When people in the UK talk about GSP, they usually mean the DCTS or its predecessor.
Q: Can I still use a GSP Form A under the DCTS?
Yes. Form A (Certificate of Origin Form A) is still a valid proof of origin document under the UK DCTS. It just needs to be issued correctly by the exporting country’s authority.
Q: What if my supplier cannot provide Form A or a REX statement?
Without valid origin evidence, you cannot claim the preferential duty rate. You will need to pay the full MFN (Most Favoured Nation) rate. Some importers choose to pay the full rate and then seek repayment (known as a C285 claim) if they get origin evidence later, but this is not always possible and is administratively burdensome.
Q: Does DCTS apply to goods transshipped through a third country?
It can, but only if the goods have not been substantially processed in the transit country and the original origin evidence is valid. Transshipment through a non-DCTS country does not automatically void the preference, but the customs documentation must clearly support the origin claim.
Q: How does DCTS interact with UK Free Trade Agreements?
If a country has a UK FTA (such as India, once the UK-India FTA is in force), the FTA rate will generally apply instead of the DCTS rate. You should always compare rates and use whichever is more beneficial. You cannot claim both at the same time.
Q: What is a preference code, and what goes on the customs declaration?
A preference code is a four-digit code entered on the UK customs declaration (in the Customs Declaration Service) to show that you are claiming a preferential duty rate. For DCTS claims, your customs agent will know the correct code. Always confirm with your agent that they are aware of the DCTS claim.
Q: Can the UK withdraw DCTS preferences from a country?
Yes. The UK Government can suspend or withdraw DCTS preferences if a country fails to meet conditions on human rights, labour standards, environmental commitments, or good governance. It can also graduate a country out of the scheme if it develops to a point where preferences are no longer considered necessary.
Q: Are services covered by DCTS?
No. DCTS applies to physical goods only. It reduces import tariffs on products. Services trade is governed by separate agreements.
This article is for educational purposes. Tariff rates, country eligibility, and scheme rules change regularly. Always verify current rates and eligibility on the UK Trade Tariff at trade-tariff.service.gov.uk and the official DCTS guidance on GOV.UK before making import decisions.
This article is part of a learning path — return to explore more topics.
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