Last reviewed 8 September 2023
Every time goods cross an external customs border, there has to be a formal customs declaration. One of the most basic pieces of information that is always required is a tariff number, a code that identifies the goods and defines any restrictions, requirements or charges that will apply. Exporters and importers need to know their codes because nobody (apart from HMRC) can classify their goods for them.
Lots of exporters and importers have never completed a customs declaration. That’s because they are typically completed on their behalf by a freight forwarder or customs broker. But some don’t appreciate that the declaration is in their name, and they are responsible for its accuracy.
This article looks at just one crucial piece of information that everyone sending or receiving goods to or from another country needs to know. The tariff code, also known as a product code or an HS number.
The UK, in common with 183 other countries, uses the Harmonised Commodity Description and Coding System of product classification. Usually referred to as the Harmonised System or HS, the method is developed and managed by the World Customs Organization and is used for at least 98% of world trade.
The Harmonised System
But it is only part of the story. The Harmonised System comprises a collection of six-digit codes that are common to all users. But each member country can then add further digits to classify the items more specifically. In the UK, the required code comprises eight digits for an export and usually 10 digits for an import.
International traders have a legal responsibility to allocate the correct code to their goods. The golden rule of tariff classification is that there is only one correct classification for each product. Traders may be tempted to use a code that attracts less duty or avoids restrictions or they may be put under pressure by a customer to do so. They must never do this, because it is potentially an act of fraud and carries serious punishment.
How does a trader find the correct code for their product? The primary source of information for British companies is the UK Integrated Online Tariff, which is one of three parts of HMRC’s guide to customs regulations. For many years, it was published as a large, three volume, printed guide but now is only available online.
Finding the code
For some traders, finding the code is quite straightforward. Many goods are defined in familiar terms and the description will comfortably fit. But, in many cases, the task can be more problematic.
The product may be classified in one of several different ways. To find the right code, we need some accurate information including the:
type of product
purpose of the product
materials used to make it
production methods used to make it
way it is packaged.
The tariff website above provides a search tool that we can use by entering key words. This is only of limited use for two main reasons.
First, it’s a simple search tool that only looks for the exact string of characters that we enter. We’ve got so used to what are known as intelligent searches, as used by Google, which both corrects typing errors and looks for items logically related to the search term. On the tariff website, we can miss things if we are not completely accurate. Recently, I was looking for a tariff code for soy sauce, and my search returned no results. That was because it was described in the tariff as soya sauce. Google would have resolved that, the tariff didn’t.
Second, the item we’re looking for may be described in a different way. For example, it may be primarily described by the material it’s made from. I have a coffee mug on my desk. I know that entering the words mug or cup won’t help me, because the tariff defines this item by what it’s made from, namely ceramics.
It may be more productive to look at the tariff classifications in full. We can do this in numerical order or in alphabetical order. The former will allow us to see the range of classifications logically, and in many cases we will be able to drill down into the correct area and find the right code that way. In numerical order, there is a clear logic to the system, starting with “raw” products (items that have had no significant processing) such as fresh fruit and vegetables, animal products, moving into items that have undergone significant change.
The system is divided in 21 sections, and further into 98 chapters, the latter making up the first two digits of the code. My coffee mug would fall into section 13: Articles of stone, plaster, cement, asbestos, mica or similar materials; ceramic products; glass and glassware. As with many items, it is first defined by what it’s made of. The section is then divided into three chapters, 68; Articles of stone, plaster, cement, asbestos, mica or similar materials, 69: Ceramic products and 70: Glass and glassware. I can open up chapter 69 and see that it comprises three headings. The first is bricks, blocks and tiles, the second is refractory goods. These aren’t relevant, so I am left with the third heading, “other.” This heading has 10 sub-headings, each comprising four digits. I can see that 6911, “tableware, kitchenware and other household items of porcelain or china” is where I need to be. I need to know about the material used here, as china or porcelain is one of three kinds of ceramic listed. The first item specifically lists a range of tableware items for cutting, grinding, etc. That’s clearly not right, so the next code, other tableware, is what I’m looking for. The 10-digit code is 6911 1000 90, but if I’m exporting, I only need the first eight digits.
It isn’t always so easy. If I can’t decide which is the right code, there is help available.
First, there are six General interpretive Rules. These are set down by the WCO and are therefore used by each member country.
Second, the UK Government website has guides for a number of specific ranges of goods that are recognised as being difficult to classify.
Third, HMRC offers an informal advice service. This is accessible via email, and will usually provide a (non-binding) answer within five days.
If we’re still not sure, we can opt for the ultimate solution, which is to request an Advanced Tariff Ruling. This will provide a binding decision. But it can take up to 120 days, so it is vital to plan well in advance if we need to go down this route.
Above all, exporters and importers must only use a tariff number that they are entirely confident is correct. We may be asked by HMRC to explain our choice, so it’s wise to keep on file any information we have used in making our decision. Being able to show that we acted reasonably may count in our favour in the event that HMRC don’t agree with our decision. Don’t ever guess the number, and don’t be swayed by a customer or supplier who wants you to use a number you’re not comfortable with. It’s your declaration and you are legally responsible for it. False declarations can lead to serious punishments.
It's worth remembering that the codes are updated periodically. WCO updates the six-digit system every five years (2022 was the most recent update) while the UK system is updated at the beginning of each year. Remember to check regularly for any updates.
Finally, a word of advice for traders in Northern Ireland. If you are bringing goods into Northern Ireland from outside the UK and EU, and they are at risk of entering the EU, you should use Northern Ireland Online Tariff rather than the one referred to above.