Here, we look at what things to consider when classifying homeware products and a complex product example which requires extra consideration.  

The maze of product diversity 

Homeware products come in a myriad of shapes, sizes, materials, and functions, making their classification a daunting task. From ceramic dinnerware to upholstered furniture, each item presents unique characteristics that must be carefully analysed to determine the appropriate tariff code. Furthermore, the evolving nature of homeware design and innovation adds another layer of complexity, requiring businesses to stay abreast of the latest product developments to ensure accurate classification. For example, even a simple product such as a wooden photo frame requires specific knowledge regarding whether the wood used is Tropical or not, and beyond that, if the Tropical wood is included in a specific list in the additional chapter notes. 

The classification of homeware products is not solely dependent on their physical attributes but also on complex regulatory guidelines and trade policies governing international commerce. Different countries and regions may have their own classification systems and rules, further complicating the process for businesses engaged in cross-border trade. Failure to adhere to these regulations can result in customs delays, fines, or even legal repercussions, underscoring the importance of accurate classification. 

Harnessing technology for precision classification 

In the face of these challenges, technology emerges as a valuable tool for businesses seeking to streamline their customs classification processes and gain greater accuracy in tariff codes. A customs classification solution like TariffTel allows retailers to classify by product attribute and material composition, using data directly from your suppliers who know your products best. This enables businesses to assign the correct tariff codes with unprecedented accuracy and efficiency.  

TariffTel holds thousands of item types and provides an easy-to-read breakdown of the key points relating to the classification of a given homeware product. It also offers guidance in the form of clarifying information for products which are particularly complex from a classification perspective. 

A complex example of a homeware classification with hidden pitfalls 

A plant pot would seemingly be a simple classification, however, there are details which will change the code generated for this product, as well as its duty rate. Within TariffTel we have separated plant pots into four item types, based initially on whether the plant pot is made using Plaited or Wickerwork materials/construction, as this will change whether the product is classified in Heading 4602 or not.  

For this example, this plant pot is made of Base Metal – Aluminium – Not Cast and is Not Hand-made, so, we would choose a “Not Plaited/Wickerwork” Item Type. The next attribute to decide on is if the product is “Decorative or Ornamental” or “Functional.” Here, the clarifying information attached to each item type explains the meaning of these terms, and we explain that “Functional” refers to a plant pot which has drainage hole/s at the base and is used as a functional plant pot. Whereas “Decorative or Ornamental” means a plant pot that does not have these drainage hole/s, and, therefore, is not used as a functional plant pot, but serves a decorative or ornamental purpose. These two options determine whether the plant pot will be classified to Heading 8306290000 – Ornamental Articles of Base Metal – Duty Rate 0.00%, or to Heading 7616999099 – Other Articles of Aluminium – Duty Rate 6.00%.  

The difference between whether a product is “Functional”, or, “Decorative or Ornamental”, is not explained within the Chapter or Section Notes, which are the most easily accessible pieces of guidance within the tariff, nor is that difference explained in the Explanatory Notes, which are not generally accessible, but hold a much greater level of granular detail on how to classify. Instead, this is information we have researched from Binding Tariff Information rulings, Advanced Tariff Rulings, and CROSS (US binding rulings), which have allowed us to understand how the higher authorities interpret the tariff book for these products.  

This is just one example of a product which has hidden levels of complexity that are not easily understood when just using the tariff book. There are many other products which are equally as complicated and where the rules to accurately classify are held elsewhere. 

Ensuring compliance and efficiency 

With access to up-to-date tariff codes and real-time regulatory updates, TariffTel customers can confidently navigate the complexities of homeware classification while minimising the risk of supply chain disruption and potential penalties. Moreover, by streamlining classification processes, TariffTel can enhance operational efficiency, allowing businesses to focus their resources on driving growth and innovation. 

Interested in how to classify food products as well as homewares? Read our recent food classification blog to see more complexities in classification.

The post Tariff codes for homeware products appeared first on .

In tariff classification, the combination of accurate data and expert knowledge is essential to assign the correct tariff code to your goods. Simply looking up a code in the tariff book or an online tool, without considering the section, chapter, and explanatory notes, often leads to a wrong classification and incorrect duty payment. This means you could be over or under paying duty costs and your business could be in line to save money if you implement a better classification solution. You also run the risk of being non-compliant with trade regulations if codes are incorrect. This has consequences and makes trade compliance a major priority for businesses today.

If your business is classifying 500+ SKUS on a regular basis each week, does your team have the time or knowledge to go into detail on every code to ensure accuracy? You may think that new AI solutions that have recently come to market are the answer. In our experience, they fall short when it comes to guaranteeing accuracy of tariff codes, and the combination of advanced customs technology and tariff code expertise is the answer with major brands such as M&S and ASDA agreeing and using our trusted TariffTel solution to classify goods.

Here we look in detail at what makes up a tariff code and how duty is assigned. Understanding the harmonised system and the way it works, can support your decision in finding the right tariff code solution for your business.

Why do we need tariff codes?

The primary use is to categorise goods for exporting and importing internationally. We have a standardised system that ensures consistency in how products are classified across different countries and customs authorities.

The Harmonised System (HS) is an internationally recognised nomenclature developed by the World Customs Organization (WCO). Each product is assigned a unique HS code, typically comprising six to ten digits. This alphanumeric code provides a standardised and universally understood means of categorising goods.

Tariff codes are then used to determine the appropriate tariffs and duties applicable to specific goods and used by customs authorities to identify and track shipments.

A correct code means a correct duty payment and ultimately, trade compliance.

What’s the difference between HS code, HTS code and tariff codes?

There are a few variations of codes you may see. It’s important to know the difference between them.

HS Codes
HS codes are six-digit codes that classify goods based on their nature, form, and composition. The first two digits of a HS code identify the chapter, the next two digits identify the heading, and the final two digits identify the subheading. HS codes are used by 212 countries worldwide. Whilst some countries adopt the 6-digits without modification, most extend to 7-12 digits to be even more precise. Read more about HS Codes.

HTS Codes
In the US, the Harmonised Tariff Schedule (HTS) is maintained by the U.S. International Trade Commission (USITC) and is used to determine the tariff rates that apply to goods imported into the United States. The WCO provides the first six digits and the HTSUS provides the final four for additional detail. Each country maintains its own Harmonised Tariff Schedule (or similarly named).

Tariff Codes/Commodity Codes
Tariff codes or commodity codes are classification codes used to determine the customs duty that is applied to a particular product. These codes are ten digits long for imports, eight digits for export, and are used to identify specific products. The HS code makes up the first six digits whilst the final four digits are unique to each country’s tariff system, and they provide additional detail that is specific to that country’s classification systems.

Understanding the tariff code structure

A tariff code structure is complex and made up of various parts. It is based on the chapter number, heading and subheading codes of the HS nomenclature. The correct code is assigned by understanding the nuances of the chapter and heading notes which only an expert can interpret and advise on.

Chapter: The first two digits of the HS code represent the chapter, which broadly categorises goods into overarching groups. There are 99 chapters in total, each covering a specific range of products. For example, Chapter 90 is dedicated to “Optical, photographic, cinematographic, measuring, checking, precision medical or surgical instruments and apparatus; parts and accessories thereof”

Heading: The next two digits further specify the product within a chapter and are known as the heading. This level of classification provides more detail about the type of goods. Following the example above, heading 04 corresponds to “Spectacles, goggles and the like, corrective, protective or other”

Subheading: The following two digits form the subheading, offering even more precision in describing the product. Continuing with our example, subheading 10 refers to Sunglasses
Tariff Item: Some countries add two additional digits to the HS code, creating a more detailed classification known as the tariff item. This level of specificity is particularly useful for accurate customs assessment. For instance, 90.04.10.91 represents “Sunglasses with lenses of plastics which are not optically worked.”

Take a look at how some seemingly straight forward products from our customer M&S, can be complex to classify without the right knowledge.

Understanding the structure and significance of the HS code is fundamental for anyone engaged in international trade. From customs classification managers to business owners, a grasp of this universal classification system facilitates smoother transactions, enables accurate documentation, and contributes to the efficiency of the global supply chain.

Having the right classification solution in place for your business is an indispensable tool that supports your trade in the connected global economy. TariffTel’s combination of advanced customs data and our unrivalled team expertise create a leading solution for every business prioritising trade efficiency and growth.

If you want to find out more about a tariff code solution that’s right for your business or want to learn how your business could benefit from TariffTel, get in touch with our team.

The post Tariff codes explained – What are HS and HTS codes & why are they important? appeared first on .

If you’re involved in international trade, you’ll know the significance of compliance in shipping goods across borders cannot be overstated and that navigating different countries’ customs procedures is complex and time-consuming. Beyond being a regulatory obligation, compliance is the keystone that ensures a smooth, efficient, and risk-free international shipping experience.

There is a digital revolution taking place right now in compliance which is changing the way we operate. Where some businesses still operate customs classification by manual processes, many forward-looking businesses have invested in solutions such as TariffTel in a bid to expel the grey areas arising from manual inputs and are increasingly looking to augment their capabilities and accuracy with technology that can support the whole business. Customs classification is important for all businesses who import and export goods internationally, affecting many different departments in a business from sales to warehousing, all those who contribute to ensuring stock arrives on shelves or machine parts are available in the warehouse at the right time. Hold ups in shipment can mean extra costs and missed potential sales so compliance in assigning the correct HS codes and ensuring goods arrive at their destination on time has never been more critical. Business critical in fact.

This blog delves into why compliance is now no longer just a tick-box exercise for businesses, but a necessity to get right every time, when it comes to global shipping operations. We look into why upholding a rigorous stance on compliance serves as a protective shield against potential shipping roadblocks.

Understanding the complexity of international shipping

As businesses expand beyond their domestic borders, they encounter the intricate web of international shipping and customs regulations. Each country presents its own set of import and export rules, duties, tariffs, and documentation prerequisites. Successfully manoeuvring through this intricate landscape requires a careful and diligent approach to compliance. A single misstep can set off a chain reaction of delays, penalties, or even the seizure of goods. Embracing and prioritising compliance is without question a strategic imperative, enabling companies to navigate this complexity smoothly whilst ensuring business continuity, and safeguarding reputation.

It’s important to note that compliance isn’t solely confined to customs and border control agencies. It extends its reach throughout the entire shipping process, encompassing elements such as precise documentation and transparent declarations. Neglecting these vital aspects can cause disruptions in supply chains, leading to delivery delays and potential revenue loss.

Risks of non-compliance

By embracing compliance, companies not only ensure regulatory alignment but also build a robust shield against potential risks.

Financial:
Non-compliance with international trade regulations can cast a shadow over a company’s whole global operations, potentially bringing about financial setbacks or damaging a company’s reputation. Among these risks, financial penalties and fines act as deterrents and fines can be back-dated for 3 years to make up for under-payment of duties owed, for example. Governments and regulatory bodies across countries enforce compliance through fines, which can escalate quickly depending on the severity of the violation. Such penalties can mean that funds are diverted from elsewhere in the business such as growth initiatives or employee development.

Delays and disruptions:
Delays and disruptions emerge as another critical risk arising from non-compliance. Customs and border control agencies play a pivotal role in international trade, with the power to halt goods for inspection or verification of documentation. Non-compliant shipments are susceptible to longer processing times, leading to shipment delays that can fall through the supply chain. Consequently, production schedules may be thrown off track, triggering a domino effect on downstream processes and customer commitments.

Confiscation of goods:
The threat of goods confiscation looms as a tangible risk, particularly for companies that overlook or deliberately sidestep trade regulations. Customs authorities possess the authority to seize and hold goods that fail to comply with custom regulations. This can be financially disastrous, as the company not only loses the value of the confiscated goods but also incurs additional costs associated with storage, retrieval, and potential legal proceedings. It can also impact supplier relations.

Loss of market access:
Another risk is the potential loss of market access. Non-compliance can trigger trade restrictions or bans that restrict a company’s entry into certain markets. This not only limits growth opportunities but also weakens the company’s global footprint. Similarly, the removal of trade privileges can be a severe blow to companies that rely on preferential tariffs or trade agreements to remain competitive.

Brand reputation:
The ethical consumer of today has high expectations for businesses they buy from and being compliant is something they look for in their ethics and values. Businesses that prioritise compliance are seen as responsible and trustworthy, fostering brand loyalty and customer advocacy.

Navigating trade compliance

Compliance and customs classification go hand in hand in today’s trading environment. Where once assigning HS codes may have been siloed to a small team, it now expands to many areas of a business. It involves a more collaborative approach and is considered a business-critical function for large enterprises as well as expanding businesses trading internationally and with growth in their sights.

Having the right technology solution in place to accurately document, manage and assign HS codes across all areas of the business involved in the supply chain ensures a more streamlined approach where compliance is at the centre. A solution like TariffTel is an advanced customs classification solution, ensuring accurate and compliant HS code assignment every time and is trusted by leading businesses such as M&S, boohoo, Primark and ASDA. TariffTel empowers businesses to make informed decisions about their global trade operations and confidently navigate the intricate world of compliance.

To book a demo and find out more about TariffTel please contact our expert team.

The post The importance of compliance in customs classification appeared first on .

Unlike previous years when demand far out stripped supply and getting hold of a comfy outdoor sofa meant a wait of 6+ months, savvy retailers like M&S are more than prepared this year, knowing developments they’ve made in digitising their supply chain will stand them in good stead to cater for all demands this Summer. And with families and friends getting outside for the King’s Coronation, many have been getting their gardens ready even earlier this year. 

Why prioritise customs classification 

Classifying Summer products correctly is an important step in the buying process to ensure goods arrive in time for the Summer rush. Our customer M&S has been using our automated customs classification solution TariffTel for numerous years to assign tariff codes correctly and ensure compliance in customs procedures every time. Not only are they kept automatically up to date with changes to the HS code system, as and when they are made, but our expert team works with them throughout the year to solve potentially complex classifications.  

We’ve talked previously about how a gold leaf chocolate carrot at Easter presented a few challenges when classifying, in this blog, we speak to Daniel Mcmenemy, one of our customs classification experts, to look at some popular outdoor Summer products which require some special consideration when classifying this year. 

Classifying garden furniture

Garden furniture is often top of people’s wish list in Summer. How easy is it to classify garden sets like sofas, tables and lounge seats? When it comes to classifying garden furniture, the type of material used is generally not a major factor as most garden furniture can be classified under heading 9401/9403. This heading is focused on whether the product is made of wood, metal or plastic, and where it is used, such as in an office, kitchen, or bedroom. However, the classification of garden furniture can become more complex when dealing with product sets that include multiple items, such as a sofa, chair, and table. 

In such cases, determining the appropriate classification requires us to identify the essential character of the product. This means understanding which item in the set imparts the essential function or purpose of the product. This can be determined by analysing the primary use of the set and the relative value of the items in question. By identifying the essential character of the product, you can ensure that it is classified correctly and avoid any issues during the customs clearance process. 

In the case of this sofa, chair and table set from M&S, the sofa/chair and table are classifiable to different chapters in the tariff, however as they all serve the same function, they could be classified under one heading which imparts the essential character. To determine this, we can look at the primary use of the set, as well as looking at the value of the items in question. For example, if the value of the sofa outweighs that of the table, the classification would be against the sofa, and vice versa if the table was the higher value. 

Classifying multi-use fire pits

A cross between a fire pit and a table typically means that this dual-use item is classified according to its essential characteristic – the fire pit, rather than the table.

Let’s take the example of this M&S product which is particularly intriguing as it presents a unique classification challenge due to its multifunctionality. It can function both as a table and a steel burner, and following the General Rules of Interpretation it would be classified based on the heading that provides the most specific description or, failing that, the heading that covers its essential characteristic. In this case, the product is primarily described as a firepit, with the added benefit of being a versatile piece that can also function as an outdoor coffee table. Additionally, the value of the firepit far outweighs that of the surrounding table. As a result, we would classify this product as a firepit, as it provides the primary function of the item, while the table serves as a secondary feature. Keeping all of these factors in mind can help ensure accurate classification of multi-use products. 

Classification of outdoor lighting – Increases in solar-powered and LED 

To understand how the tariff changes over time, let’s take a closer look at this example: solar-powered lighting.  

Historically, prior to 2022, the tariff did not provide specific provisions for solar energy-powered lights. However, with the recent five-year update to the Tariff in 2022, there are now specific headings for “Photovoltaic” lighting. It is important to note that these headings only apply when the photovoltaic lighting is designed solely for use with LEDs. This change in focus towards LEDs within the Tariff is also noteworthy, as they were not as frequently mentioned before the 2022 update. When it comes to lighting, there are several considerations to keep in mind, such as the location, the light’s intended use, the power source, the material, and whether it is exclusively usable with LED light sources. 

What’s the HS code for bunting? 

Many people like bunting in their gardens all year round, and the King’s Coronation means we are seeing it even more.  

The classification of bunting is typically straightforward, falling under heading 9505 as a “Festive, carnival or other entertainment article.” However, this classification only applies to bunting made of non-durable materials like paper or plastic. If the bunting is constructed from a more durable material, such as woven cotton like in this particular case, it falls under a different heading. 

In this instance, the appropriate classification for the cotton bunting would be under heading 6307 as an “Other made up Textile Article.” 

During peak sales seasons, it is vital your business is prepared for the complexities that classification can throw up. Whether you’re a growing business, or a larger enterprise, implementing an intuitive, automated system like TariffTel for customs classifications can significantly reduce the time required to classify products and facilitate communication between vendors. This can mean the difference in getting the up-to-date information you need to classifying product quickly and compliantly.   

If you have a question about classification, get in touch with our expert team. Don’t’ forget to follow us on LinkedIn for more classification updates.  

The post Prioritising product classification means stock arrives in time for Summer appeared first on .

Here we explain the differences in some of the common terminology used in customs classification and when to use each code.  

What is customs classification? 

Put simply, customs classification refers to the process of assigning a code to a product that is to be imported or exported. This code is used to determine the tariff rates that apply to the goods, as well as to facilitate trade by enabling customs authorities to identify and track shipments. There are a few variations of a code you may see, including HS codes, HTS codes, and Tariff/Commodity Codes. 

HS Codes 

The Harmonised System (HS) is an internationally standardised system of names and numbers for classifying traded products. It was developed by the World Customs Organisation (WCO) and is used by more than 200 countries to assign HS codes. HS codes are six-digit codes that classify goods based on their nature, form, and composition. The first two digits of a HS code identify the chapter, the next two digits identify the heading, and the final two digits identify the subheading. Read more about HS codes.  

HTS Codes 

In the US, the Harmonised Tariff Schedule (HTS) is maintained by the U.S. International Trade Commission (USITC) and is used to determine the tariff rates that apply to goods imported into the United States. The WCO provides the first six digits and the HTSUS provides the final four for additional detail. Each country maintains its own Harmonised Tariff Schedule (or similarly named).  

Tariff Codes/Commodity Codes 

Tariff codes or commodity codes are classification codes used to determine the customs duty that is applied to a particular product. These codes are ten digits long for imports, eight digits for export, and are used to identify specific products. The HS code makes up the first six digits whilst the final four digits are unique to each country’s tariff system, and they provide additional detail that is specific to that country’s classification systems. 

How to use the different codes 

While there are several types of codes that are used for customs classification, they all serve the same purpose of allowing customs authorities to identify and track shipments, as well as determining the tariff rates that apply to those goods.  

HS codes are the most widely used system for customs classification worldwide and provide the basis for the other codes under one global classification system. The HTS codes provide the final four digits within the US context and Tariff codes and Commodity codes are full classification codes used to determine the customs duty for specific products.  

This visual helps explain what makes up a code: 

As an importer or exporter, understanding the differences between these codes is crucial for navigating the complex world of international trade.  

Whether you’re a growing business, or a larger enterprise, implementing an intuitive system like TariffTel for customs classifications can significantly reduce the time required to classify products and facilitates communication between vendors and suppliers meaning you get up-to-date information on the products you’re classifying. It also means your business is informed of HS code updates automatically. 

If you want to find out more about HS codes or want to learn how your business could benefit from TariffTel, get in touch with our team.  

The post What’s the difference between a HS code and tariff code? appeared first on .

Here, we look at why a supplier-first approach to customs classification is the right strategy for businesses, how technology is crucial to enable this relationship with suppliers and why customs managers (or import or customs teams) can’t do it all.

Why suppliers matter in customs classification

Suppliers are the gatekeepers to a source of knowledge about your products that can support the transportation of goods from one country or border to another, quickly and compliantly. Each product being transported needs a HS code which is used by customs authorities around the world to identify products when assigning duties and taxes. Although many countries have adopted the same classification system from the World Customs Organisation (WCO), each country can interpret it differently. This can create added complexities for customs classification teams tasked with navigating the HS code book, which, in itself, is constantly being updated.

Even if teams use a simple classification tool or manual process, having to look up HS codes, product by product, is time consuming and often impractical. An invoice description rarely details all the essential characteristics and late changes in fabric or material composition can further complicate the process and lead to inaccuracies. From our classification assessments, we estimate that the majority of UK retailers that are not using a digitised customs classification solution are only 60-80% compliant in their classifications and could be facing fines and excessive border delays as a result. With the help of suppliers, customs classification teams can capture essential characteristics and images of thousands of product items with minimal effort, leading to accurate, unambiguous, and auditable classifications and duty rates.

Involving suppliers with an intelligent customs classification platform such as TariffTel makes the process quick, easy and devoid of human error as the system will ‘error’ if certain inputs are made that would result in no HS code being assigned. In fact, retailers can be assured compliance levels will raise significantly knowing that the quality of data provided by suppliers is of a quality to classify products correctly, plus they have the assurance of automated monthly checks to ensure no invalid codes are present.

The same can be said for improved accuracy rates in other industries such as automotive and manufacturing. Suppliers can provide details about a product item that makes classification simple such as material and construction methods, both of which help when assigning the correct code and when providing customs descriptions to the importer for confirmation. This efficiency can reduce customs classification operating costs for a business by an average of up to 25% subject to their size and maturity. In some cases, it could be an initial immediate cost reduction of reducing head count where resources are allocated more strategically to other departments, or more gradual in optimising operational efficiencies by shortening time scales and operating at a higher rate. Ongoing cost saving opportunities present themselves throughout the digital transformation journey.

While this approach does give suppliers more input into the classification process, it safeguards the importer’s total control over the final classification. Customs managers can always reject supplier submissions, or alternatively seek further clarification using a question and answer module. Communication is both ways.

AI in customs classification

With the complexity of classifying products in different customs authorities, AI and API centric solutions are scalable and can be quick to be deployed by businesses, however the accuracy and compliance can often be inadequate.  These solutions are common for e-commerce and marketplaces where parcel delivery or courier services are the primary mode of transport.

In the example of classifying clothing such as ‘shorts’, you are referred to the most probable description based on the largest volume of imports for that country, the tool could assume ‘Women’s shorts made out of cotton’.  Shorts could be for a different gender or made from a different material, so such assumptions are often flawed. A customs classification platform that seamlessly incorporates supplier engagement proves superior here in the classification process as products are assigned HS codes based on verifiable data.

Why successful businesses have digitised their customs classification process

Many businesses have been shifting away from manual classification avenues and exploring systematic options for years and as a result now have greater visibility and communication across all parts of the supply chain. With a single, centralised platform such as TariffTel, data is available in real-time and brings more control and efficiency, especially given suppliers can be put at the heart of the process.

To find out more about TariffTel and the importance of digitising your customs classification process, please get in touch.

The post A supplier-first approach to customs classification appeared first on .

For anyone appointed in this role, training is a big, expensive factor, whether the person is just starting out or very experienced. Training is essential to keep them abreast of constant HS book updates and ensures they are up to date with worldwide customs procedures and policies. Typically, the minimum experience businesses require when recruiting customs managers is 5+ years as these are specialist roles.

Here we look at the challenges facing customs classification teams today and how you can set up teams for success, enabling them to be efficient and engaged in the constant changes affecting their industry.

Who is responsible for customs compliance?

Typically, the responsibility of customs compliance falls to customs classification managers and their teams, but the whole organisation is involved in some way or other from buyers and merchandisers to finance departments and suppliers. Each department plays its role in sharing up-to-date information on the goods being exported or imported.

For some internal teams, classification is a manual process and having to look up tariff codes, product by product, is time consuming and often impractical leading to inaccuracies and non-compliance. Teams can be made much more efficient and improve their compliance levels significantly with the use of a customs classification platform that supports them in collating and managing the data needed for classification. For example, by involving suppliers in the classification process to provide details such as material and construction methods, teams have accurate data to hand to assign the correct HS code. Such platforms, like TariffTel, can instantaneously assign HS codes to goods leaving customs classification managers time to focus on other custom processes within the business.

Buyers and merchandisers are often involved in the classification process, either supporting a customs classification team or potentially filling a gap whilst recruitment happens. They don’t have the technical skills and knowledge to accurately classify the goods they are importing/exporting and this can lead to problems. If the HS codes they assign are incorrect and customs become aware of this, a company is at risk of non-compliance penalties, border delays, seizure of the products or even denial of import privileges.

As you can see, getting HS codes right is essential, so what other options do you have if you do not have the resource internally? 

Customs brokers are one option; however, this can be a costly avenue and you are then putting the trust of classification on to someone with little or no experience with your products. You may need to share documentation with the broker, engage in email chains and send excel spreadsheets to provide them the data they need. It is a manual and time-consuming process and given it’s the 21^st century, surely should be digitised by now. That is where our trusted customs classification platform, TariffTel comes in.

TariffTel is a solution for businesses looking to engage with suppliers, and other third parties, to obtain product information and guarantee accurate, compliant classification instantaneously. Today we have over 26,000 registered users of TariffTel including many British high street retailers including Asda, M&S and Primark.

Why successful businesses have digitised their customs classification process

Many businesses have been shifting away from manual classification avenues and exploring systematic options for years and as a result now have greater visibility and communication across all parts of the supply chain. With a single, centralised platform such as TariffTel, data is available in real-time and brings more control and efficiency. This is especially important in an area of the supply chain where human resource can be difficult to recruit and retain.

To find out more about TariffTel and the importance of digitising your customs classification process, please get in touch.

Want to learn more about customs classification and why a supplier-first approach is best? Take a read of our blog Suppliers – why it pays to put them at the heart of customs classification

The post How to get the most out of your customs classification team appeared first on .

Highlighted below are some examples of these changes.

Food  

There has been an expansion within heading 0809.30 relating to peaches and nectarines. Previously, the heading ‘Peaches, including nectarines’ simply expanded to give options for ‘Nectarines – 0809301000’ and ‘Other – 0809309000’, however this has now been given a more detailed subheading.

‘Flat peaches (Prunus persica var. platycarpa) and flat nectarines (Prunus persica var. platerina) – 0809302000’, before expanding into ‘Nectarines – 0809303000’ and ‘Other – 0809308000’.

Alongside this, Heading ‘1006 – Rice’ has received additional ‘Other’ subheadings within husked (brown) rice, and semi-milled/wholly milled rice, both parboiled and not parboiled. This will cater for rice which does not meet the requirements for the preceding Round, Medium and Long Grain subheadings.

Magnets 

Another heading which has been expanded is ‘Permanent magnets and articles intended to become permanent magnets after magnetisation…Of Metal’. This heading has been extended to include a new subheading for magnets: ‘Containing neodymium, praseodymium, dysprosium or samarium – 85051110’ and ‘Other – 85051190’ i.e. magnets not containing the materials specified above.

3D printing 

There is a code change for Machines for Additive Manufacturing (3D printers) chapter 8485, where the last 4 digits have changed in this section:

8485800090 became 8485809000

8485800010 became 8485801000

Static Converters 

Finally, a very commonly used code, 8504403000; Static Converters – Of a kind used with telecommunication apparatus, automatic data-processing machines and units thereof’ has been removed from the tariff, subsequently changing the remaining codes within the ‘Static converters’ heading.

Importers must now work to understand where to classify charging appliances which they had previously classified to this removed heading. This task can be complex as the remaining headings relate to how energy is exchanged between a power supply and the product; a process than can differ considerably product by product.

It pays to keep up to date with changes in HS codes which are updated continuously throughout the year. Our leading TariffTel solution, supported by our expert team, ensures easy, automated customs classification to take the hassle out of navigating these changes and includes alerts to customers about changing codes. Find out more about the benefits of using a customs classification solution and the cost of getting it wrong.  

Get in touch and a member of our team can talk you through our TariffTel solution and find the right support for your business 

The post What’s changed in HS codes in the HS2023 update? appeared first on .

Getting goods to their destination, on time, is no mean feat during this time of supply chain uncertainty. For the past few years, the pandemic and geopolitical challenges have affected the global supply chain network beyond anyone’s control, especially during peak sales periods. Many businesses who have invested in digitising their supply chain now have enhanced visibility across their entire network, and are able navigate these unpredictable challenges more successfully.

However, the complexities of tariff codes remain a major challenge for many businesses, classifying each individual product prior to shipment with the correct HS code to ensure the correct duty fee is paid. We’ve been supporting many of the UK’s major retailers, such as M&S, Primark and ASDA as well as many high street retailers in processing their product classifications with the correct HS codes to ensure they are prepared. As a result, they have saved time, remained compliant and avoided over-paying duty costs, all when pressure mounts to classify more products than normal.

Read more about why it pays to get HS codes right and high price if you get it wrong.

Popular products this Christmas

TariffTel is a leading solution for tariff codes and as such, our team can reveal what popular products UK retailers have been searching for and classifying over the last six months. We have seen the most popular classified products shift as we head into Black Friday, Christmas and the January sales period. There is evidence of significant trends forming over categories such as electricals and toys, hinting at what present has the number 1 spot on Santa’s list.

Top 3 electricals – Laptops, mobile phones and rechargeable batteries.

Leading up to Christmas there has been an increase in interest for high-end electrical goods, most likely a wow factor gift on Christmas day.

Top 3 toys – Dolls, toy set, non-human toy.

Unsurprisingly, dolls, toy sets, figurines, toy characters have been making their way into stores ready to go under the tree.

Top 3 for pets – Pet toy, pet food and pet shampoo.

We’re a nation of pet lovers and it’s no surprise that pets are not being forgotten at this time of year with toys, treats and grooming products a popular choice. Lucky pooch!

HS codes in 2022

It’s not a surprise that with the increase in trade in busy sales periods, additional pressure is put on customs classification teams. Assigning a Harmonised system (HS) code or tariff code is not as simple as just checking a directory, and codes can change throughout the year. In 2022, there have been 351 sets of amendments for example, 31 relating to the wood sector, 21 to the textile sector and 77 to the agriculture sector to name a few. This equates to tens of thousands of updated HS codes to put it into perspective, which were all updated within two weeks of the changes going live on our sophisticated TariffTel customs classification system.

“HS codes can be complex. It’s imperative you know all about the product you’re trying to classify to make sure you have the correct code. Everything from source materials to country of origin. It can be easy to make assumptions which means codes can often be wrong,” says Elizabeth Davies, Customs Systems Manager at CORE for TariffTel.

Assigning the correct HS code to your goods ensures you are compliant and ensures your goods arrive at their destination without delay and without additional fees and potential loss of sales. Goods without the correct HS codes may be delayed in customs, may require payment for storage and will contribute significant paperwork to move them compliantly to their destination.

Christmas product classifications brought some challenges this year

Decorative articles for Christmas trees (9505.10) previously included a phrase within the chapter notes, which stated they ‘must have a connection with Christmas’. This led to divergent views on the interpretation of this chapter note, whereby some were classifying Christmas baubles to their constituent material, rather than under the festive heading of 9505.10. Classifying based on constituent material, rather than festive, led to an increase in the duty paid. For example, a glass bauble classified to its constituent material would pay 10% or 6% for plastic.

However, this part of the chapter note was removed from heading 9505.10, meaning that retailers were able to classify baubles to this heading as a decorative article for Christmas trees, reducing the duty paid to 0% for a glass bauble or 2% for plastic.

It certainly pays to keep abreast of HS codes and how you’re using them. Sometimes it means cost savings can be made like with this Christmas bauble example, or you risk non-compliance using out-dated codes.

Whether you’re a growing business, or a larger enterprise, implementing an intuitive system like TariffTel for customs classifications can significantly reduce the time required to classify products and facilitates communication between vendors meaning you get up-to-date information on the products you’re classifying. It also means HS code updates are done automatically.

Are you prepared for HS code updates in 2023? Are you considering a HS code tool to support your classifications?

Learn more about HS codes and how to take the hassle away from classification.

Get in touch with our TariffTel team if you want to find out more about how TariffTel can work in your business, whether you’re a growing business or large enterprise looking to improve your customs classification – we have a solution for you whatever your size.

The post Custom classifications made easy during peak sales periods  appeared first on .

• 30th September 2022 – import submissions
• 31st March 2023 – export submissions

We’re working with our TariffTel customers to ensure a smooth transition on imports which is the first to switch over, but are considering both timelines so customers are ready for all elements of CDS, sourcing the additional information needed under the CDS tariff requirements. Find out more about the differences and why the change is brought in here.

Documentation and licensing codes currently being declared on CHIEF may have changed so reviewing your tariff and HS codes should be key part of preparations for the changeover.

CDS checklist – how to be prepared

We have prepared a short checklist of requirements that you will need to do to begin planning your business transition from CHIEF to CDS. Please get in touch with our team if you have any questions – info@tarifftel.com

1. Register for a government gateway account – Click here to register – Register if you haven’t done so before and apply for CDS access
2. Register for CDS access – Click here to register and subscribe to the CDS service – You will need: Government gateway user ID & password, EORI number for GB, Unique taxpayer reference (UTR), National Insurance number (if individual or sole trader), the date you start the business
3. Provide updated authority numbers to HMRC (where applicable) – Via your CDS account
4. Customers claiming duty or tax relief – provide HMRC with additional procedure codes 

What happens after registering? 

 The way you process your declaration payments will change with CDS. CDS uses cash accounts which replaces the Flexible Accounting Systems (FAS) in CHIEF.  

After you have completed the first step of registering for CDS on the government gateway, you will be allowed a specific cash account payment ability or deferment account is available. This access will allow for management of that account.  

Authorisations

Your authorisations in CHIEF will be automatically migrated to CDS. These authorisations could include the following:
CFSP (SDP and EIDR authorisations)
Inward Processing
End Use / Authorised Use
Outward Processing
Temporary Admission
Customs Warehousing & Excise Warehousing
Applicable Guarantee details or where applicable confirmations that waivers exist

More information can be found here

For support on reviewing your HS and tariff codes in preparation for the switchover to CDS get in touch with our team.

The post Customs Declaration Service (CDS) checklist appeared first on .