What is a binding tariff?

A binding tariff or binding tariff information (BTI) is a classification decision made by the local customs authority in UK and Europe on the classification of goods. The BTI outlines the commodity code or harmonised standard (HS) number the goods are classified under and the associated duty rate plus any required licenses, quotas or quantitative restrictions. 

Why would I need a binding tariff?

 A BTI provides assurance that the goods your company is importing or exporting are classified correctly and have the correct commodity codes. The consequences of goods being classified under the incorrect commodity codes can have dire consequences for your business. Incorrect classification can lead to:

  • Over or Under payment of import Duties and VAT
  • Incorrect or Missed Licenses
  • Incorrect or Missed Restrictions
  • Mis-declared preferences

More information on the importance of commodity codes and classification can be seen here.

A BTI gives your company a classification decision which is legally binding on all UK and European customs administrations and is generally valid for 3 years (BTI decisions issued before May 2016 are valid for 6 years). This protects your company in the event of a customs query on an import or export shipment.

How do I apply for a BTI?

A company can apply for a BTI for as many items as it needs to. If you have a large stock of regularly imported and exported items the company would need to make a BTI application per product. Binding tariff applications are completed online using the links below:

For each application you will need to provide a detailed description and information on each product being classified including images and documentation. If a product cannot be classified from this information the company may need to provide samples to be reviewed and assessed. 

There is no direct cost involved for BTI decisions being completed. Do keep in mind if the local customs office incurs costs such as: 

  • Analysis
  • Obtaining outside expert advice on samples
  • Returning samples
  • Providing translation facilities 

Those costs may be charged to the company completing the application.

Can a Binding Tariff be revoked?

A binding tariff can be revoked but normally only under exceptional circumstances such as:

  • Incorrect information was sent at time of application
  • The product has changed considerably 
  • Changes to the customs tariff means the product is no longer falls into this category
Brexit and UK Issued Binding Tariffs (BTI)

With the UK leaving European Union there will be a change to UK issued BTI rulings. The UK will implement their own independent ruling system. This system will be a digital service (eBTI) and will become known as an ‘advanced ruling’. Applications will be via the existing Government Gateway online system. Any existing rulings we continue to be valid until their expiry date or until they are revoked as outlined above – whichever occurs first. 

Published by A Kennedy

An award winning, UK based, International Logistics Manager for a multinational tool company. Over 25 years experience in international logistics and supply chain management. Elected ‘Chartered Status’ by the CILT and ‘Expert Status’ by the IoSCM.

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