Using the Wrong Commodity Code could Cost you Thou$and$
Commodity codes are like most things in business – if you get them wrong, it will inevitably cost you money. If you use the wrong code, you could end up paying more duty than you need to.
Dated: 16 November 2021 Author: Terri Bruce, Director of VAT & Customs
A commodity code is the reference number that is used when importing or exporting goods and it determines the customs duties and other charges levied on the goods; any preferential treatments that may apply and any restrictions and prohibitions that apply.
Dains have recently been working with a client where we identified they were importing items from the Far East using a commodity code provided by the supplier at a higher rate of import duty than was necessary. We realised that, if the correct commodity code were used, the goods could be imported at 0% duty.
On this basis we submitted a claim for overpaid duty for 3 years which has resulted in a rebate of £500k in overpaid duty. This is HMRC approved! The client will have a cash benefit of £500k plus ongoing savings as they will be using the correct commodity codes in the future.
As you can imagine, our client is extremely happy, and we are working with them on other ways to improve customs processes to make their supply chains more efficient which makes them more competitive.
The Dains Customs team has significant experience in identifying savings for businesses. If you import or export goods, please speak to Terri Bruce or Mike Overington where they will be happy to have an initial chat free of charge.
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