Brexit planning: Classify your goods using commodity codes

The rate of customs duty (tariffs) applied to imports depends on four things:

1. the customs value of the goods;
2. the category the goods fall into;
3. the country they are being imported into; and,
4. where the goods "originate".

This page is about the second consideration – which category a product falls into.

Each category has a "commodity code" or "tariff code". There are around 5,000 different commodity groups and it is the responsibility of the trader to ensure they’ve selected the appropriate one. If customs believe goods have been "misdeclared" in an appropriate category, goods can be delayed and ultimately a different tariff rate might be applied with possibly penalties imposed too.

It is important to note that there is not simply a single tariff rate for each commodity group. A range of different tariffs can apply depending on where the goods originate. Not only can specific tariff rates apply to a country, in some cases they even apply to an individual exporter.

You can look up the rates online.

• UK: HMRC trade tariff
• EU: TARIC tariff database
• Internationally: Market access map

 

Where a free trade agreement is in place, that can reduce or eliminate tariffs. In this case a "preferential" tariff rate would apply to imports from that country. Some trade agreements make tariff concessions only for a pre-determined volume of goods. Once that volume is exceeded, a higher rate applies. These tariff concessions are called "preferential tariff quotas".

Equally, countries can take defensive measures against products they believe are being subsidised in another country. These include "anti-dumping duty" (ADD). ADD means a higher tariff rate applies to imports from a particular country or group of countries. Sometimes, specific exporters are subjected to or excluded from the ADD. The important point here is that customs authorities may challenge either the commodity group or the origin, or indeed both. The rate of tariff is linked to both.

The codes are standardised internationally in a "harmonised system" of names and numbers that classify traded products. These are maintained by the World Customs Organisation.

Example – 87 12 00 30 90 (Bicycles with ball bearings)

The code is made up as follows:

Section XVII: Vehicles, aircraft, vessels and associated transport equipment
Vehicles other than railway or tramway rolling stock, and parts and accessories thereof	87
Bicycles and other cycles (including delivery tricycles), not motorised	87 12
Bicycles with ball bearings	87 12 00 30
Consigned from Indonesia, Malaysia, Sri Lanka or Tunisia	87 12 00 30 10
Consigned from Cambodia, Pakistan or the Philippines	87 12 00 30 20
Other	87 12 00 30 90

Bicycles with ball bearings have an EU "most favoured nation" tariff of 14%. This tariff applies to all imports from outside the EU, unless a preferential tariff applies or anti-dumping duties are in place.

The EU tariff rate for "bicycles with ball bearings" (87 12 00 30 90) can be looked up on the UK Trade Tariff

As at 24 September 2020 it listed:

Most favoured nation tariff rate – 14.0%

There is a long list of countries with a preferential tariff of 0%, although in some cases a preferential tariff applies at a higher rate:

Preferential tariff – India & Vietnam –10.5%

Preferential tariff – Singapore – 11.6%                                   

Preferential tariff – Ukraine –  5.2%                                           

Anti-dumping duty applies to imports from China at a rate of 48.5%, and this is extended to include consignments from Indonesia, Malaysia, Sri Lanka, Tunisa, Cambodia, Pakistan and the Philippines.