How to Classify Goods Correctly: A Practical Guide for Importers & Exporters

Why Correct Classification Matters

Correctly classifying your goods is one of the most important steps in international trade. Your HS/commodity code determines:

• Duty rates
• VAT liability
• Import/export restrictions
• Licensing requirements
• Rules of origin eligibility
• Safety and compliance obligations
• Statistical reporting

A single incorrect code can lead to delays, penalties, overpayment of duty, or even seizure of goods. This guide gives you a clear, structured approach to classifying goods accurately and confidently.

1. Understand What HS Codes Are

HS Codes (Harmonised System Codes) are internationally recognised product classifications. They follow a global structure:

• 6 digits – International HS code
• 8 digits – EU Combined Nomenclature (CN)
• 10 digits – UK Tariff code

Example:
8525 80 91 – Digital cameras

Understanding this structure helps you navigate the tariff more effectively.

2. Gather Full Product Information

Accurate classification starts with understanding the product. You need:

• What the product is
• What it’s made of
• How it works
• Its purpose or function
• Technical specifications
• Composition breakdown (if mixed materials)
• Whether it’s part of a set or kit

The more detail you have, the easier it is to classify correctly.

3. Use the UK Trade Tariff

Search the tariff using:

• Keywords
• Product descriptions
• Material type
• Function
• Industry category

When reviewing a code, check:

• Duty rate
• VAT rate
• Import/export measures
• Licensing requirements
• Additional notes

Always read the full chapter and heading notes — they often contain crucial details.

4. Apply the General Rules of Interpretation (GRIs)

The GRIs are the legal rules used to classify goods. They help you decide:

• Which heading best describes the product
• How to classify mixed‑material goods
• How to classify sets or kits
• How to classify incomplete or unassembled items

Most classification disputes come down to incorrect application of these rules.

5. Check Explanatory Notes

The WCO and UK explanatory notes provide deeper guidance on:

• Borderline products
• Technical definitions
• Industry‑specific classifications
• Exceptions and exclusions

These notes are invaluable for complex or unusual goods.

6. Consider the Product’s Primary Function

Many products could fit multiple headings. In these cases, classify based on:

• The product’s main purpose
• How it is normally used
• What gives it its essential character

This is especially important for:

• Multi‑function devices
• Kits and sets
• Composite goods

7. Avoid Common Classification Mistakes

Many traders run into problems because they:

• Copy supplier codes without checking
• Choose codes based on duty rate rather than description
• Use Google instead of the official tariff
• Ignore chapter and section notes
• Misclassify multi‑component goods
• Fail to update codes after tariff changes

Correct classification protects your business from costly errors.

8. Review Rules of Origin

HS codes are essential for determining whether goods qualify for preferential duty rates under Free Trade Agreements.

Rules of origin may require:

• A specific HS code shift
• A minimum percentage of local content
• A specific manufacturing process

Incorrect classification can invalidate your origin claim.

9. Keep Evidence for Audit

HMRC may request proof of how you classified your goods. Keep:

• Product specifications
• Technical sheets
• Supplier descriptions
• Classification notes
• Internal decision records

Good documentation protects you during audits.

10. Seek Professional Support When Needed

Some products are genuinely complex to classify, including:

• Electronics
• Machinery
• Chemicals
• Textiles
• Multi‑component goods
• Kits and sets

A customs specialist can help you avoid disputes, delays, and penalties.

How We Help You Classify Goods Correctly

We support businesses with:

• Full HS code classification
• Verification of supplier‑provided codes
• Classification for new product lines
• Support with complex or technical goods
• Rules of origin guidance
• Ongoing compliance reviews

Our goal is simple: accurate classification, full compliance, and no surprises at the border.

Explore More in Our Knowledge Hub

You can also read:

• HS Code Guides
• Importer Checklists
• Duty Relief Guides
• Port Guides
• Customs Glossary

If you need help classifying your goods correctly, our customs specialists are ready to support you.

Get in touch for expert classification and customs compliance guidance