A wrong HS code means the wrong duty rate and the wrong requirements for the goods. HMRC can issue a post clearance demand (form C18) going back up to three years, with interest, and an inaccurate declaration can attract a civil penalty of up to 2,500 GBP under Notice 301. Add goods held for examination and a standing truck.
Where wrong codes come from
- A code copied from the supplier or from an old invoice, never checked against the current tariff.
- Classification by lookalike: the product resembles another one, so it inherits its code.
- Nomenclature changes: the tariff is updated and an old code disappears or changes scope.
- EU and UK differences: the code from the Polish export declaration does not always map one to one onto the UK commodity code.
What happens when HMRC finds the error
Most errors surface in a post clearance audit, not at the border. HMRC has three years to review import declarations. If the code was wrong and duty underpaid, the importer receives a C18 demand: the difference in duty and import VAT for every consignment declared under that code, plus interest. With a repeated error running for years, the amounts can be startling, because they multiply by the number of shipments.
A civil penalty runs on a separate track. The UK civil penalty regime for customs contraventions (Customs Notice 301) provides penalties of up to 1,000 GBP, and up to 2,500 GBP per contravention for the more significant irregularities. The penalty does not replace the back duty, it comes on top of it.
Costs no penalty table shows
- Goods held while the classification is queried: examination, sometimes sampling.
- Truck standing at the terminal or an inland inspection site: the waiting clock, as a rule, runs at the cost of the party ordering transport.
- Lost preferences: a wrong code can sink the zero tariff under the EU and UK agreement, because rules of origin are checked per code.
- A late delivery and an unhappy consignee, which no tariff table prices in.
How to reduce the risk
We verify the code before the first shipment, not after it. On the UK side the tool is the UK Integrated Online Tariff, on the EU side TARIC and the Polish ISZTAR. For ambiguous goods it is worth applying for a binding classification decision (in the UK: an Advance Tariff Ruling), which protects you going forward. We also keep documents consistent: the same description and code on the invoice, the packing list and the declaration. How to find the code is covered in our article on CN and HS tariff codes, and the whole clearance in the piece on UK customs clearance after Brexit.
Sources
- GOV.UK: Notice 301, civil penalties for contraventions of customs law
- GOV.UK: UK Integrated Online Tariff (commodity code search)
- GOV.UK: import goods into the UK, step by step
Not sure the code for your goods is right? We check the classification as part of our Polish and UK customs service before dispatch. Describe the goods in our contact form before the mistake gets a chance to cost you.
