finding out commodity codes for imported goods?

catmulogen

Hi, Would appreciate any help about this please.
I'm in the process of trying to set up a small business. I've already bought some stock from local suppliers and found a supplier of religious goods I wanted in Southern Ireland. I contacted Business Link for advice about this and they gave me the number of the Tariff clasification service to find out the commodity codes of the things I am going to buy. After this, they said to contact HMRC re duties to be paid.
I rang the Tariff people today and was told that I could get the codes for 3 products / phone call. Now I thought I could just say 'Religious goods' and would get one code ( I know..... but I am new to all this ) but the lady said I had to specify each item and say what they were made of. To be honest I had to make a very vague guess. Lady said she'd put me through to the appropriate department and I waited for ages, didn't get to speak to anyone so I thought i'd come on here for some advice

I'm probably going to buy about 20 different items from this one company so do I have to get 20 different different codes? Is it enough if I make a 'guess' at what I think the products are made of or, should I contact the supplier to find out exactly? Finally, out of interest, what do big companies do that order 1000's of products?

Thanks
Cat

GreyhoundAngel

catmulogen wrote: »

Hi, Would appreciate any help about this please.
I'm in the process of trying to set up a small business. I've already bought some stock from local suppliers and found a supplier of religious goods I wanted in Southern Ireland.

I'm probably going to buy about 20 different items from this one company so do I have to get 20 different different codes? Is it enough if I make a 'guess' at what I think the products are made of or, should I contact the supplier to find out exactly? Finally, out of interest, what do big companies do that order 1000's of products?

Thanks
Cat

Hi There,

Firstly, just to clarify (please don't feel insulted - I've known this to happen!) - The number of "Companies" you buy from is not a factor when dealing with Import Duty.

HMCE are exactly spot on with what they have told you (as you'd expect).

EACH item you buy is likely to have a different Tariff Code (and quite often a different Duty % Rate). This will depend on a number of criteria:

1) What the item category is (ie Clothing)
2) What the item actually is (ie trousers)
3) What the item is made of (ie cotton)
4) Where it's coming from (ie EU countries or Rest of the World)

To show one example (using the above) = Example A

If you buy Cotton Trousers, Dresses and Skirts from Taiwan you would have the following:

1) Tariff Code A for the Trousers
2) Tariff Code B for the Dresses
3) Tariff Code C for the Skirts

These may have the same Tariff Heading number, but will have different "ending digits" (ie they may all start with 8900 but will finish 001 / 002 /003 etc) And in some intances may have different Duty Rates as well)

To show another example (using a variation of the above) = Example B

If you buy Cotton Trousers, Rayon Dresses and Silk Skirts from Taiwan you would have the following:

1) Tariff Code A for the Trousers
2) Tariff Code B for the Dresses
3) Tariff Code C for the Skirts

These will almost certainly have completely different Tariff Codes as they are made from different materials, and again will probably have different Duty Rates as well.

Using Example B you would calculate it as follows:
If you bought 10 of each of these items (total of 30 items) at £1.00 per item - and the following Duty Rates (example ONLY) you could work it out as follows :

Tariff Code A - Cotton Trousers - £1.00 per item x 10 - Duty Rate 10%
Tariff Code B - Rayon Dresses - £1.00 per item x 10 - Duty Rate 12%
Tariff Code C - Silk Shirts - £1.00 per item x 10 - Duty Rate 14%

Will give you :

A - Total £10.00 x 10% = £1.00
B - Total £10.00 x 12% = £1.20
C - Total £10.00 x 14% = £1.40

The above was an example for importing from a "Rest of the World" country (Taiwan). Importing from EU Countries is different. Duty rates are not applicable on most BUT import VAT WILL be.

Another thing you will need to bear in mind is that Duty is calculated on the invoice value of the items (as broken down above) but you also have to pay Import VAT. The VAT is calculated on the invoice amount + Total Duty + Freight Costs = Import VAT total.

To complicate things further - there are different ways that freight can be charged. FOB / C&F / CIF and all of these require slightly different ways of calculating Duty & Vat.

FOB - Freight on Board - Means freight costs are carried forward & Costed on the Airway bill (so would not show on the invoice from your supplier) This method means that as YOU are paying the freight costs, YOU will have the right to choose the company you want to transport your goods from the Supplier to the UK.

C&F / CIF - Cost & Freight (or Cost Insurance Freight) - Means the freight costs are prepaid and not shown on the Airway Bill (ie will either show as a seperate item on your supplier invoice or will be included in the unit price of the goods). This method will almost certainly mean that the Freight is "paid" by the Supplier, and therefore you will have NO input as to who they use to transport the goods from their premises to the UK.

Finally, some types of goods (eg textiles) require import licences / certificates of origin / or other additional paperwork. And some types of goods are restricted by "Quota's" (ie there are only so many that can be imported to the UK - once the Quota is used, that's it until the following year).

One of my Clients used to import Semi-conductors ... you'd think that they would all be the same code & rate yes ? errrrmmm no ..... it was very rare that I would do an import entry for them and have less than TEN tariff codes with various Duty Rates !!

My advice would be to contact your supplier, get them to send you detailed information regarding the products (including what they're made from) and then either speak to HMCE or contact several Freight Forwarding Companies (UK based) and ask for their help in getting the tariff codes / Duty Rates.

Better yet, contact several Freight forwarding Companies & get their Rates for Import Clearance & Delivery (and if YOU are paying the freight costs, ask for their consol rates for moving it from your supplier to the UK) - it really is not something that you can do yourself (Import Entries have to be done using special Computer systems linked to HMCE)

There is quite a lot to get your head around when importing goods but a good Freight Forwarding Company can really help you.

I hope this has been of some help.
G:A x

catmulogen

Hi Greyhound Angel
Thankyou so much for such a detailed reply. Got to admit that i'm now feeling a bit out of my depth. There seems such a lot to get my little head around! I think my first job tomorrow will be to forward a list of the items to the company and get as much detail as I can about each product and then get advice about the product codes.
Wish me luck

bsc8180

Hi,

Cant post links yet Grrrr. Google uktradeinfo and go to the first site returned. The site is run by HMRC, this will allow you to work out the commodity code. Go to the Intrastat section then look for ICN online.

They only do a certain number of lookups over the phone at HMRC.
TBH the supplier should be printing the commodity codes on their invoice if they are supplied intra EC so the work is already done for you?

Not sure on the import duty side though, may be worth asking for a visit from someone who was with the customs bit of HM Customs before they merged with the Revenue. Have always found them helpful. Phone the local HMRC office for this, not one of the UK wide call centres.

Cheers
Paul

GreyhoundAngel

You're welcome Cat

Please don't feel daunted by my essay. Some types of imports / goods are very straight forward.

I belatedly realised that you did in fact mention importing from Southern Ireland ? Therefore a lot of what I said above will not be pertinent to you for this (being an EU Country) - so will be much simpler.

I just felt that it would be useful for you (and any others reading it) to give an overview of the way things work, and especially for importing from outside the EU.

In some ways explaining the in's & out's of Importing (from a D&V point) always sounds way more complicated than it usually is. As long as you find out what proceedures have to be followed, and research what is generally required plus any additional requirements there might be - you will be fine !!

G:A x