For all UK imports and exports, commodity codes are used to classify goods to ensure the right amounts of tax, VAT and duty are paid. Here we explain why commodity codes are important and how you can make sure you get the correct code.
What is a commodity code used for?
When importing and exporting, you are responsible for providing the correct Commodity Codes for your goods. You’ll need your commodity codes so you can:
- Complete declarations and other paperwork
- Find out if there is any duty or VAT to pay
- Check if there are any duty reliefs
Commodity codes are standardised throughout the EU and are usually made up of ten numbers with occasional exceptions. For example, for UK exports you often only need the first eight digits, yet some goods commodity codes have up to 14 digits. To find the correct commodity code for your goods visit the UK Online Trade Tariff, where you can look up commodity codes, duty and VAT rates. As well as the reasons described above, once you have the correct commodity code, it will be used to identify your goods and help you determine if you have any other obligations relating to your goods, such as requiring an import or export licence. Using the correct codes is essential because if your goods are inspected at customs, and the contents don’t match the commodity code, your goods could be seized or delayed, and you’ll be liable for these costs. If you’re not sure what commodity code is right for your goods, you can email HMRC who will advise you on how to classify your goods. Simply send an email to classification.enquiries@hmrc.gsi.gov.uk and include a full description of your product – what it is made from, its use and function, and how it’s presented or packaged.
What is a classification ruling?
If you’re still not sure you have the correct commodity code, you can apply for a Binding Tariff Information (BTI) ruling to give certainty about the correct classification and how much duty you’ll need to pay when importing your goods into the EU. BTI rulings are:
- legally binding throughout the EU for three years
- free, but you may have to pay costs (such as laboratory analysis or expert advice)
You apply for a ruling using the eBTI online service.
- Register for an EORI number if you don’t have one. It usually takes between one and three working days.
- Sign up to use eBTI on the Government Gateway website.
- Sign in to eBTI and read the guidance notes on how to make an eBTI application.
At John Good Logistics, we’re experts in Customs Clearance, and our Documentation and Customs team are on hand to provide advice and guidance whenever you need it. Please contact us if you have any questions.