Tariff headings may be changed for different reasons: for example, following annual tariff nomenclature changes, publication of an EU regulation aimed at ensuring uniform classification within the EU or as the result of reconsideration of the classification of a particular product. HM Revenue and Customs consult with UK businesses where the impact of the change has been identified as significant and time permits, or business expertise is sought to help determine the correct classification of a product. Consultation is generally through trade associations to obtain the views of a wide spectrum of the trade. An example of this is the consultation undertaken during the major review of the electronic tariff chapters for implementation in January 2007.
Goods in international trade are classified under the EC Combined Nomenclature which provides the legal basis for the Community’s Tariff. Tariff headings may be varied for different reasons, for example following annual nomenclature changes or publication of an EU regulation aimed at ensuring uniform classification within the EU. HM Revenue and Customs are legally obliged to implement such changes. They assess the impact of significant changes by analysing import declaration data and consulting the trade. Consultation is generally through trade associations to obtain the views of a wide spectrum of the trade. An example of this is the consultation undertaken during the major review of the electronic tariff chapters for implementation in January 2007.
Imported electronic components that are parts of information technology products such as computers are free of import duty under international agreement. Other imported electronic components are generally subject to positive tariffs. EC agreements provide for relief from payment of import duties, subject to conditions, where goods are imported for processing such as incorporation into a UK manufactured product for re-export.
When HM Revenue and Customs become aware that import duty paid is less than the amount of duty legally due they must apply the correct rate retrospectively in line with the legal provisions of the Community Customs Code. There are circumstances where the obligation to pay the additional duty may be suspended, for example where a successful application for remission of duty is made. Alternatively, importers may protect themselves from retrospective claims for duty by applying to HM Revenue and Customs for an advance ruling known as Binding Tariff Information (BTI). A BTI covers a specific product and is normally valid for six years. If HM Revenue and Customs change the tariff heading and the BTI is revoked the holder will be protected from a retrospective claim and may still rely on the BTI for up to six months where binding contracts for the purchase or sale of the goods have been concluded.
The Binding Tariff Information, which classified a board camera as a part of a camera was invalidated as a result of an HMRC tariff classification review. Product information confirmed that the product was capable of capturing an image. Consequently, the item was reclassified as a camera.