If you intend to move goods to and from the UK, it's essential that they're classified in order to identify what duties and controls apply and ensure a correct customs declaration. Whether or not you have an agent who handles customs entries on your behalf, you have a legal responsibility to ensure the correct classification is applied. Incorrect classification can lead to delays in clearing goods, overpayment of duty and possible penalties.
HM Revenue & Customs (HMRC) uses classification information to collect data and trade statistics. It's in your interest to correctly classify your goods as it will help to ensure that you:
- pay the correct amount of duty and VAT
- know if duty is suspended on any of your goods
- know if any preferential duty rates can be applied
- know whether you need to obtain an import or export licence - for plant and animal products on health and conservation grounds or for firearms and hazardous materials
- know whether excise or anti-dumping duties apply (dumping relates to goods that are exported from one country to another at a lower than normal price)
- avoid paying interest on back-payments for incorrect classification
- avoid seizure of your goods or delays to their movement
Many goods are subject to specific controls - eg those falling under the Common Agricultural Policy (CAP) of the European Union (EU), or those subject to anti-dumping duties or tariff quotas. By correctly classifying these products you'll know what measures apply to you.
The Tariff is based on the EU TARIC (TARiff Intégré Communautaire). Member states of the EU hold commodity codes in the TARIC. Commodity codes and other regulations are updated daily, which ensures that importers and exporters can rely on the same standards and treatment throughout the EU. The UK Trade Tariff uses the daily updates of the TARIC directly, so that Tariff users have access to consistent accurate information.
Occasionally correct classification relies on supporting resources such as HMRC industry specific classification guides, Harmonised System Explanatory Notes and Combined Nomenclature Explanatory Notes.