Reviewed in August 2020. Content will be updated as negotiations develop.
After the transition period (31st December 2020) the UK will become a ‘third country’ to the European Union (EU). This will mean, among many other things, a requirement to know your commodity code(s) as such information is now required for the importing and exporting process.
Commodity codes are unique codes which classify products for import and export so you can:
• Fill in declarations and other paperwork
• Check if there’s duty or VAT to pay
• Find out about duty reliefs
A commodity code is made up of numbers starting at six-digits (for example the code for apples 080810) these numbers include multiple pieces of information to provide a detailed picture of the product being described, such as the broad type of product, any materials used to make it and even the type of method used for production.
It’s important to note that the UK will remain a participating country in how to structure commodity codes, so all of this information applies after the transition period (31st December 2020).
It might be useful to know that commodity codes can
also be referred to as
“classification codes”, “tariff codes”,
“customs tariff number” or “HS codes”.
Getting it Right V Getting it Wrong
Getting the right commodity code is fundamental and it is the legal obligation of the trader. Invest the time needed to obtain the correct commodity code as getting the code wrong can result in penalties. If you rely on the commodity code from a supplier, you’ll need to check it is accurate. This task can be complex, but we’ve help at hand to make sure you get the right code for your business needs.
If, for example you had been incorrectly using a commodity code given to you by a supplier which attracts a 0% duty rate upon import into the EU and instead should have been using a commodity code which attracts duty rate at 6.5%, could result in a post clearance customs audit and a potential significant unbudgeted expense. Regardless of how the error occurred, it is the importer who will be assessed for this duty.
Bottom line: Invest the time needed to obtain the correct commodity code.
We will now discuss the various options on how you can do this.
What Do I Need To Know About My Product?
In order to find the correct commodity code for your product, you’ll need to describe each product accurately.
For example, you must know:
How Many Digits Should My Commodity Code Be?
Let’s firstly look at the first six digits of a commodity code. These first six digits are part of the globally recognised harmonised system, meaning that the first six digits of the code are universally recognised and understood. As you have already seen, a lot of detail is needed to accurately assign your product with an accurate commodity code. Let’s use the example below:
A snack made from a mixture of freeze dried fruit, destined for human consumption. The product is packaged in a cardboard box, containing 7 sachets of 14 grams each. Ingredients: freeze dried bananas, freeze dried pineapples, freeze dried apples, freeze dried strawberries, freeze dried blueberries, antioxidants: ascorbic acid, acidity modulator: citric acid, salt.
The corresponding commodity code is 200897.
Let’s break this down to show to the digits refer to chapter, heading and subheading:
Step-by-step Videos on Finding Commodity Codes
We’ve created these videos to show you the exact process of finding the commodity code using the example of the mixed fruit snack. The process is different for Ireland and Northern Ireland the two videos are accessible below.
Step-by-step example on finding a commodity code
Step-by-step example on finding a commodity code
Commodity Code Extensions
This is where the consistency ends as many countries may choose to extend commodity codes from the six-digits up to a 14-digit level to allow for more targeted tariff policies. This is why you may see commodity codes of different lengths.
It’s important to note length of the full code depends if the products are imports or exports. Imports have a 10-digit commodity codes and exports have an eight-digit commodity codes.
The EU classification system has two elements which are added to the six-digit commodity code, they are called the Combined Nomenclature (CN) and TARIC (the integrated Tariff of the EU) codes and are explained in more detail below:
Using the earlier example of the fruit snack. Let’s now see what the import and export commodity codes look like with the added CN and TARIC codes:
Getting Your Commodity Code
Now that you know how the commodity code is structured and extended,
let’s now look at the ways in which you can find commodity code:
To get the correct tariff classification of your product you can request a BTI ruling. It’s not a legal requirement to have a BTI ruling, but it has advantages. It is the only option which gives you legal certainty for three years
about the correct tariff classification for your product to work out customs duties, export refunds, licensing requirements, quotas or other restrictions in advance. A BTI ruling is free, but you may have to pay the costs of laboratory analysis, expert advice and/or returning samples. For more information, use the links below:
If you are based in Ireland click here
If you are based in Northern Ireland click here