Advice

Export specialised machinery to Australia

Free Trade Agreement export guide

Overview

The UK has a world-renowned industrial heritage and around 240,000 manufacturing businesses, including many with globally recognised capabilities in automation, energy, and technology (source: BEIS Business Population Estimates, 2022). Under the UK-Australia Free Tree Agreement (FTA), manufacturers will benefit from tariff-free exports, flexible rules of origin and simple customs procedures on UK exports such as wind turbine blades and agricultural machinery. This will benefit our industrial heartlands such as Northern Ireland, where machinery and transport equipment accounted for almost 64% of goods exports to Australia in 2022 (source: HMRC, Regional trade in goods statistics, Q4 2022).

Overall, the FTA could increase the gross value added of this sector UK-wide by around £465 million (source: DIT UK-Australia FTA Impact Assessment, 2021. This figure includes the categories of manufactures, manufacture of electronic equipment, manufacture of machinery and equipment, and manufacturing NEC).

UK manufacturers will benefit from cheaper access to important Australian machinery parts like hydraulic power engines and pressure-reducing valves, allowing them to be more competitive and grow their businesses. High-quality recovered and recycled materials will count as originating in the UK, supporting businesses to shift towards eco-friendly production. By including specific priorities to cooperate on low emissions, renewable energy and energy-efficient technologies, this deal promotes closer collaboration and innovation on next-generation green technology.

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The UK has a world-renowned industrial heritage and around 240,000 manufacturing businesses

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Manufacturers will benefit from tariff-free exports

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The FTA could increase the gross value added of this sector UK-wide by around £465 million


The UK and Australia will also work together to support the emergence of a more sustainable economy, with potential areas of focus including eco-labelling, repair, remanufacture and reuse, and sustainable supply chains. This is further supported by liberal provisions around services, trade, and free flows of data, which will make it easier and safer for UK based manufacturers to remotely inspect machinery in Australia whilst monitoring internal data for performance, efficiency and research.

No more tariffs

Total tariff reductions could be worth more than £29 million for the manufacturing sector (source: HMRC, Regional trade in goods statistics, Q2 2021). Examples of reductions in the manufacturing sector include:

Tariff heading Previous tariff New tariff
Forklifts 5% 0%
Wind-powered generators 5% 0%
Filtering or purifying machinery Up to 5% 0%
Harvesting machinery 5% 0%

More flexible rules of origin (RoO)

The new rules of origin have been designed to support the UK manufacturing sector, who are heavily reliant on imports, to lessen the cost of both importing components from Australia, and exporting final products back to Australia. The UK imported around £251 million of machinery from Australia in 2022 (source: 18 HMRC Overseas Trade in Goods Statistics, September 2021. Figure covers goods codes HS84-85). These included key components like hydraulic power engines, spark-ignition motors, and pressure-reducing valves, which previously faced UK tariffs of up to 5%. Removing tariffs on these products could make it cheaper for UK manufacturers to import components and assemble the final product in the UK, provided they comply with the rules of origin outlined in the FTA.

Example

Use the UK's Trade Tariff tool to first identify the Harmonised System (HS) code of your good. Consult the Product Specific Rules of the FTA document and look up the rule for your good. For the purposes of these rules, HS codes are defined at the 2-, 4- and 6-digit level.

Harmonised System (HS) code: 843242

Product: Fertiliser distributers

Rule: RVC40 or CTSH

This rule can be fulfilled either through a Regional Value Content (RVC) of 40% or Change in Tariff Subheading (CTSH).

RVC

RVC can be calculated via either the build-down method (using value of non-originating materials) or the build-up method (using value of originating materials). For example, a UK trader produces Product A using a variety of originating and non-originating materials, with the intention of exporting the product to Australia.

To meet originating status, Product A must meet a Product Specific Rule of RVC40. To calculate Product A’s RVC, the trader would need to determine the total value of the good they are producing based on the costs as determined within the Rules of Origin Chapter of the FTA.

Build-down method (non-originating materials)

  1. Use RoO chapter text to calculate value of ‘non originating materials’ in product A, and the value of Product A (‘value of the good’)
  2. Subtract the value of the ‘non-originating materials’ from the value of the good itself
  3. Divide by the value of the good and multiply by 100 for the RVC %
  4. If the final figure is 40 and above, then product A qualifies as originating and can access preferential tariff rates when exported to Australia

Build-up method (originating materials)

  1. Use RoO chapter text to calculate the value of the ‘originating materials’ used in product A, and the value of Product A (‘value of the good’)
  2. Divide the value of the ‘originating materials’ by the value of the good and multiply by 100 for the RVC %
  3. If the final figure is 40 and above, then product A qualifies as originating and can access preferential tariff rates when exported to Australia

Please find more information on RVC rules in the guidance on using rules of origin in the FTA.

CTSH

This rule can be fulfilled if all non-originating materials used in the production of the good have undergone sufficient processing to change any of the six digits (or 'Tariff Subheading') of their HS code. Please find more information on CTSH rules in the guidance on how to use rules of origin in the FTA.

Faster customs procedures, opportunities for innovation and much more

Simplified data and documentation requirements will help to ensure goods exit customs quickly, provided all requirements have been met. Before exporting their goods, businesses can request a legally binding, written decision from the relevant customs authority on the tariff classification and origin of their product. Australia will ensure that the business receives the ruling within 90 days after receiving the request. These rulings will take effect on the date they are issued and remain in effect for at least three years provided the law, facts and circumstances remain the same. Either the exporter or importer may apply for an advanced legally binding ruling.

British companies will now be able to bid for Australian government contracts worth around £10 billion per year on an equal footing with Australian companies. It is the most substantial level of access Australia has ever granted in a free trade agreement. UK businesses will have the legally guaranteed opportunity to bid for contracts in major infrastructure projects such as railway constructions and road upgrades. Further information on procurement can be found here.

The UK and Australia committed in the FTA to cooperate in activities aimed at encouraging the development and adoption of emerging technologies, as well as facilitating trade in related products and services. This may also include encouraging commercialisation opportunities, as well as collaboration between research institutions, industries, and businesses related to emerging technologies.

The FTA provides for a bespoke Strategic Innovation Dialogue which will act as a UK-Australia cooperative forum on innovation promotion and facilitation, to which industry experts may be invited. The work of the Dialogue will be factored into future revisions should the FTA be updated in the future.

UK exporters can have confidence that any valuable IP will be protected when trading with Australia; the new FTA includes commitments that will both protect and enforce IP rights, both registered and unregistered.

Australian product regulations and import conditions

Please check the information on regulations that apply to your industry. You can find these in the Australian Government manufacturing industry factsheet.

For used machinery, please ensure you adhere to biosecurity import requirements.

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Case study: exporting a fruit-sorting machine to Australia

Please note that this case study is illustrative only and should not be relied on as a substitute for your own research. Exporters should check on the most up to date rules and processes with the relevant customs authority.

Actions taken by the exporter before exporting

1. Agree incoterms and terms of payment with importers in Australia

"We agreed on Shipping DAP to Australian importer. This means we will be responsible for all costs and risks associated with the delivery to the final agreed place."

2. Determine the HS code(s)

Use the UK's Trade Tariff tool to find your HS code.

"The HS code for our specialised machinery is HS 84324200."

3. Check if goods are prohibited

Search the list of goods that are restricted or require a permit on the Australian Border Force website.

"We don't need a licence for new agricultural machinery."

4. Gather commercial documents and submit to transporter

  • Commercial invoice (content of goods and demand for payment)

"Our product is a new fertiliser distributer, valued at 1,000 AUD."

  • Packing list (weight, packaging and carton numbers of goods)
  • RoO documents

"The fertiliser distributer meets the RVC40 requirement and qualifies for originating status and 0% import tariff into Australia."

The UK exporter can provide an origin declaration for the Australian importer, or the importer can make a claim for preferential tariff treatment based on Importer’s Knowledge. The Australian importer can use Importer’s Knowledge based on either having documentation demonstrating that the good is originating, or being able to reasonably rely on supporting documentation provided by the UK exporter or UK producer that the good is originating. The importer must be able to provide such documentation to Australia’s customs authorities upon request.

5. Gather shipping documents (done by the transporter)

"Bill of landing, as the good is sent by sea."

6. Get UK customs clearance

Make a export declaration through customs declaration services.

7. Check if you need to submit an Exit Summary Declaration

"Safety and security requirements met, we do not need to submit Exit Summary Declaration."

Actions taken by the importer to clear Australian customs

1. Submit an Impending Arrival Report at (air)port of entry

2. Submit an Actual Arrival Report at (air)port of entry

3. Submit a Customs Import Declaration

Customs import declaration is required for goods worth more than 1,000 AUD, otherwise declare using self-assessed clearance declaration.

"In our example full Customs Import Declaration is needed as value is above threshold."

For further information on exporting from the UK, use the check duties and customs procedures for exporting goods tool.

For further information on importing into Australia, use the DFAT FTA portal.

Additional information for selling goods in Australia

Selling goods in Australia will require following certain rules and regulations according to the agreements you have in place with your buyer. Additional information on incoterms and import conditions in Australia can be found on great.gov.uk.

The Australian Border Force regulates all goods imported into Australia. You’ll need to provide import declarations and documents and pay all relevant duties and taxes.

In order to benefit from preferential tariff treatment under the FTA, businesses must make certain declarations that satisfy data requirements.

Goods and Services Tax (GST) is a tax on most goods and services in Australia. The current GST rate is 10%. Learn more about GST on the ATO’s website. Our e-commerce explainer provides an overview of the different applications of GST for B2B and B2C sales.

Certain goods must be correctly labelled with a trade description before they can be imported into Australia. Please note that not all imported goods need labelling.

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Doing business in Australia

Australia shares a common language and culture with the UK, as well as business and legal practices such as intellectual property protection and the rule of law. This makes it easier for UK companies to do business there. With a population of over 25 million, including more than 1 million Britons, Australia is an ideal place to test and develop new products and services. Around three-fifths of the total population live in Australia’s 4 largest cities, making it easy to prioritise where to launch your product or service.

Legal disclaimer

The information provided on this webpage is for guidance only and should not be relied on as a substitute for your own research or independent advice. No investment and/or business decision should be made solely on the basis of information presented in this document. It is recommended that an independent due diligence investigation is conducted before entering into engagement with any individual, firm, company or other organisation mentioned. DBT accepts no responsibility for any loss or damage caused to any person as result of any error, omission, inaccurate or misleading statement in this document. The accuracy, completeness or up-to-dateness of the content of any website mentioned in this document is not guaranteed in any way, implied or explicit.

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