27 June 2023Guide
UK Guide to Tariff Classification and Duty Minimisation

What is a tariff code?

Tariff codes, or otherwise known as commodity codes, are product identification numbers used to calculate the percentage of import duty and VAT you need to pay on your imports.

Most countries adhere to the internationally agreed upon Harmonised System (HS) created by the World Customs Organisation (WCO) to establish a uniform classification scheme for international trade.

Tariff codes are eight digits long for exports, ten digits long for imports, and there are thousands of them to describe specific goods.

What are duties and taxes?

Customs authorities collect tax when goods are imported into the country to protect local business, the economy, and environment: the two most common are Import Duty and Value Added Tax (VAT).

A Duty is the tax placed on all cross-border goods determined by a percentage of the value of the goods.

VAT is another type of tax payable, commonly paid by the end consumer, also determined by a percentage of the value of the goods.

There are additional taxes that can be added to your import, such as the Excise Duty for alcohol and fuel products, so it is important to be aware, and comply with relevant taxes involved with international trade.

There are free resources and tax calculators available to the public online, however seeking support from customs specialist teams or brokers will make navigating this process easy and help with possibly reclassifying tariffs to reduce duty payments.

Duty Minimisation

Our Customs Consultancy division will review tariff codes used by clients and where possible, seek to re-classify their goods in order that they benefit from lower duty rates. When re-classifications are achieved, we seek to recover potential overpaid duty over the previous three years. On the instruction of our client, we will obtain written binding tariffs with HMRC so that ongoing savings can be achieved.

Advanced Tariff Rulings (ATR’s) are legally binding with all UK Customs authorities.

As part of the re-classifying review, we seek to identify tariff suspensions that might relate to a product. Importers can request the suspension of customs duty when the goods that they import are not available in the UK or are not available in sufficient quantity.

Tariff classification, duties, and taxes can be complex, so having the support of a customs specialist is crucial in helping to identify cost savings, duty suspension, preferential rates, licensing requirements and additional duty due such as Anti-Dumping Duty amongst others specific to the goods you are importing.

If you would like more information about tariff classification or duty minimisation, please contact our customs team here.

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