UK oil and gas industry warned to know commodity codes or risk damage from no-deal Brexit
Published by Nicholas Woodroof,
Adam Johnson, director of Leeds-based Tudor International Freight, said the industry’s companies currently did not need to quote commodity codes to Her Majesty’s Revenue & Customs (HMRC) for goods traded with the EU, as the UK was part of its customs union. However, that would change if Britain left the bloc without a withdrawal agreement, which could happen as soon as 31 October.
He said: “In these circumstances, UK businesses will become legally responsible for quoting correct commodity codes - sometimes called tariff classifications - for items they import from or export to the EU. These consist of 10 digits and there are literally thousands of them, covering goods ranging in size from drawing pins to jumbo jet engines, so discerning the right ones isn’t necessarily a simple task. “Commodity codes identify whether the correct amounts of VAT and customs duty - which varies according to the nature of the goods but is calculated as a percentage of their value - have been paid.
“They additionally indicate whether an import or export licence is needed for the goods concerned and if they’re covered by measures such as the EU’s Common Agricultural Policy, anti-dumping duties or tariff quotas.”
Johnson said UK oil and gas sector EU traders classifying items incorrectly could be asked to pay any outstanding VAT or duty on customs entry or have their goods delayed or seized. They could also be forced to hand over any arrears they had accumulated over at least the previous three years, plus interest.
He said failure to quote the correct codes could therefore delay or end the movement of items and prove much more costly than using the right numbers.
Johnson commented: “Useful guidance on identifying the correct commodity codes can be found on the www.gov.uk website, including advice on numerous goods which can be difficult to classify, and HMRC’s trade tariff lookup tool is a valuable search engine, enabling companies to identify correct codes, based on details about goods they enter.”
He added that oil and gas sector businesses still having difficulty after accessing the tool could email HMRC’s Tariff Classification Service, via email@example.com, and an expert officer would respond within three working days.
Johnson said: “Our guidance about commodity codes should be seen alongside our previous advice to businesses trading internationally only with the EU about preparing for a no-deal Brexit. This urged them to familiarise themselves with other matters that don’t affect them now, such as the Economic Operator Registration and Identification programme, Customs Declaration Service, and Transitional Simplified Import and Export Procedure.
“The need to understand these issues reflects that, after a no-deal Brexit, British businesses will essentially trade with the EU under the system currently applying to their transactions with countries outside the bloc. Similarly, the EU will treat UK companies trading with it broadly like those in any other external nation.
“The need for oil and gas industry businesses to heed our advice is becoming ever-more pressing. The chances of the UK leaving the EU without a deal in the autumn have increased through the stances of the candidates in the current Conservative party leadership contest and attitudes of party members, who will effectively select our next Prime Minister.”
Read the article online at: https://www.oilfieldtechnology.com/special-reports/26062019/uk-oil-and-gas-industry-warned-to-know-commodity-codes-or-risk-damage-from-no-deal-brexit/
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