9 Sep 2021
The figures 64031200 won’t mean much to most people. But in the world of import and export codes, they refer to something very specific — ski boots! This article explains the mysterious world of commodity codes to help you get yours right first time, pay the right duties, and avoid problems moving your goods in and out of the country.
If you import or export goods, you need to understand commodity codes as they classify your cross-border goods. This enables you to complete declarations and other paperwork correctly; check if there’s duty or VAT to pay; and find out about duty reliefs. You are responsible for providing the correct codes for your goods.
The code for your product helps you see what import or export declarations and other paperwork you need to complete and how to do it correctly.
Correct declaration ensures you pay the right customs duty and VAT. It will help you check whether you need a licence to move your goods; and if you could pay less customs duty — for example, for goods covered by a trade agreement, a preferential duty rate or a duty suspension.
Correct declaration also ensures transportation of your goods meets any relevant regulations and controls. If customs authorities inspect your goods, incorrectly declared items or those with incomplete documentation can be seized, delayed or destroyed, at significant cost to your company.
You should also check you have the correct codes regularly as customs regulations and charges change often.
This is where it gets more complex. Most countries around the world use the World Customs Organization’s trade tariff harmonized system (HS), which comprises more than 5,000 commodity groups, each identified by a six-digit code. However, product specific decisions are particular to each country. If you use the code from an overseas supplier, you must check if the treatment is the same and how much of the code applies in the UK.
Only the first six digits are used worldwide. In the European Union (EU), most commodity codes have an extra four digits to make 10, but certain goods have 14. To add to the complexity, exports out of the UK only need eight digits, but for imports, you need 10.
The first two numerals in a code refer to which chapter your goods fall under in the WCO harmonized system. The next four refer to the HS heading and subheading. Digits seven and eight apply to the product’s combined nomenclature (CN) code. Nine and 10, if you need them, refer to the EU customs tariff (Taric) code. 14-digit numbers include an additional Taric code.
As an example, UK manufactured ski boots would be categorised as: footwear (chapter 64); outer soles of rubber, plastic or leather (heading 03); sports footwear (subhead 12); ski or snowboard boots (CN 00). So their code for export from the UK is 64031200. For import to the UK, it is 6403120000.
For UK imports or exports, you can find your product’s commodity code or get help classifying it with the government’s trade tariff tool.
You need accurate details about your product, which may include the type, purpose, materials, production methods and type of packaging.
Finding the right code can be complicated, but there is plenty of guidance. For example, if your product is made from two materials — such as clothing made of 40% polyester and 60% cotton — you usually classify it using the higher percentage content.
If your items are sold in a set to be used together, you should classify them using the most significant item in the set.
There are exceptions too, so check the relevant section and chapter notes for your goods in the tool.
HMRC’s advice can be non-legally binding, or legally binding which takes longer. Consider legally binding advice if your goods are hard to classify and informal advice is not suitable for any reason; or if you have a new product that has never been classified before.