Don’t get your Brexit commodity codes or tariffs wrong

If you want to continue selling goods cross-border between the UK and EU after 31 December 2020, you will have to learn about commodity codes. If you cannot accurately match your goods to the right code, you will be paying the wrong duties – risking top-up taxes and fines – and delaying deliveries to frustrated customers.

The UK is still formulating its post-EU commodity code schema – so this area is confusing. The tariffs the EU will charge goods coming from the UK is subject to the ongoing Free Trade Agreement negotiations. If there is no UK-EU FTA full WTO tariffs will apply.

The commodity codes will have to be included in the customs declaration that you will need to provide to clear any goods through UK or EU customs. This will make clear how much taxes – VAT and tariffs – you should be paying.

How do commodity codes work?

Commodity codes are made up with a range of digits that identify a particular product. They specify the type of product, materials used and the production method as follows:

• HS Code digits: It starts with the global standard – Harmonised System, or HS code, – which is a minimum of six digits.
• EU additional digits: The EU, including the UK for the time being, has added up to a further 8 – making potentially 14. These extra EU numbers include: 2 digits CN heading (Combined Nomenclature); 2 digits TARIC (Integrated Tariff of the European Communities) Subheading. 10 digits is the most common. But it is possible to add 4 more under the additional TARIC code.

How to find out the right commodity code

Most tax authorities publish online their commodity codes for you to match to your products. The UK has a Trade Tariff tool online. You can use the UK’s HMRC’s Tariff Classification Service to get non-legally binding classification advice. HMRC will respond to your email within five working days. The EU member states have various similar tools.

GVC CAN HELP YOU WITH BREXIT SOLUTIONS. BECOME VAT COMPLIANT IN THE UK AND EU AS WELL AS GETTING AND EORI NUMBER IN BOTH REGIONS.

If you want to continue selling goods cross-border between the UK and EU after 31 December 2020, you will have to learn about commodity codes. If you cannot accurately match your goods to the right code, you will be paying the wrong duties – risking top-up taxes and fines – and delaying deliveries to frustrated customers.

The UK is still formulating its post-EU commodity code schema – so this area is confusing. The tariffs the EU will charge goods coming from the UK is subject to the ongoing Free Trade Agreement negotiations. If there is no UK-EU FTA full WTO tariffs will apply.

The commodity codes will have to be included in the customs declaration that you will need to provide to clear any goods through UK or EU customs. This will make clear how much taxes – VAT and tariffs – you should be paying.

How do commodity codes work?

Commodity codes are made up with a range of digits that identify a particular product. They specify the type of product, materials used and the production method as follows:

• HS Code digits: It starts with the global standard – Harmonised System, or HS code, – which is a minimum of six digits.
• EU additional digits: The EU, including the UK for the time being, has added up to a further 8 – making potentially 14. These extra EU numbers include: 2 digits CN heading (Combined Nomenclature); 2 digits TARIC (Integrated Tariff of the European Communities) Subheading. 10 digits is the most common. But it is possible to add 4 more under the additional TARIC code.

How to find out the right commodity code

Most tax authorities publish online their commodity codes for you to match to your products. The UK has a Trade Tariff tool online. You can use the UK’s HMRC’s Tariff Classification Service to get non-legally binding classification advice. HMRC will respond to your email within five working days. The EU member states have various similar tools.

Source: Avalara