What is a commodity code?
A commodity code is a set of international codes used to classify imported and exported goods when making customs declarations. These codes define customs duty and taxes payable on imported or exported goods. In the UK, commodity codes consist of 10 digits for imports and 8 digits for exports. The first 6 digits form the global Harmonized System (HS) code, with the remaining digits specific to the UK tariff.
What does a commodity code affect?
Accurate determination of the right commodity code has implications for:
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Customs Duty and Import VAT
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Other taxes and charges
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Preferential rates under trade agreements if the rules of origin are met
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Licensing or certification requirements
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Anti-Dumping Duty, Tariff Quotas, or UK trade remedies
How can I find the right commodity code?
To find the right commodity code, you can use the UK Online Trade Tariff tool provided on GOV.UK. Enter specific words like “cotton shirt” or “car tyre.” Start with the chapter level and then narrow down to the subheading to find the right section and chapter notes. The material used, purpose of the item, manufacturing process, and specifications of the item to be imported should be considered while making the classification. It is the responsibility of the importer of record to ensure that the right commodity code is used, regardless of whether an agent is used to make the customs declaration.
What are the reasons for disputes?
Disputes arise due to:
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Marketing descriptions were used instead of technical ones
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Instead of referring to the UK tariff, supplier codes were copied
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Goods were classified based on intended usage rather than technical characteristics
Errors can lead to delays, additional duties and VAT, and penalties.
What if HMRC disputes the commodity code?
In the event that HMRC disputes the commodity code for your product, you need to provide them with technical datasheets, material composition reports, etc. You can contact HMRC’s Tariff Classification Service for any information you need. Their email is classification.enquiries@hmrc.gov.uk.
How do I avoid disputes?
In the event that you need to import a product into the UK, you can obtain an Advance Tariff Ruling (ATaR) for a legally binding classification. This ruling will be valid for a period of three years.
Have you ever had your commodity code disputed by HMRC? Share your experience — it may help others avoid the same problem.