Why 2 out of every 5 tariff codes are typically wrong

And what it’s costing you…

Tariff codes might look like a routine administrative step when you’re preparing goods for international shipment but when they’re wrong, the financial and operational impacts can be enormous. In audits of new customers, we consistently find that 40 % of tariff codes are incorrect, leading businesses to overpay duty, incur compliance risk, and deal with avoidable delays at borders.

Why misclassification happens — And why it’s hard to fix

Even though in the recent political climate, tariff changes are making global headlines more than ever before, the job of maintaining accurate classification isn’t made any easier. In fact it’s harder. Reading about changing tariffs is one thing, but assigning the right tariff code requires deep product knowledge plus a solid grasp of evolving customs regulations and combing through customs resources and references to get things right. That complexity is compounded when:

-Duty rates change frequently
-Regulatory updates aren’t monitored consistently
-Product descriptions from suppliers are incomplete or unclear

The result? Increased duty costs, shipment held at borders, lost revenue — especially for perishable goods — and fines that can stretch into the millions. In the UK alone, a major retailer faced a £4.7m fine in unpaid anti-dumping duties and VAT over the declared origin of aluminium foil. 

Misclassification is more common than you think

Misclassification is a common, overlooked, issue. Customs authorities around the world record tens of thousands of misclassified products each year, resulting in billions in lost revenue and penalties. This underscores how easy it is for classification to go wrong across global supply chains. A single misclassification can be replicated across thousands of SKUs easily and go undetected for possibly years. Getting classification right every time matters. Compliant trade really does all start with the correct tariff code, as highlighted in this Chartered Institute of Export & International Trade webinar.

At the heart of classification is the Harmonised System (HS) — the international standard used by more than 200 countries to determine:

-Duties and taxes
-Trade statistics
-Regulatory requirements

Even a one‑digit error in an HS code can:

-Inflate duty payments
-Trigger customs inspections
-Delay shipments
-Expose your business to fines or audits

Compliance specialists routinely uncover hundreds of thousands of pounds in overpaid duties because codes were either assigned incorrectly or never reviewed. Organisations like Barbourne Brooks help businesses recoup these overpayments, often going back four years in duty relief.

Food and drink products are among the most technically complex to classify because accurate classification depends on precise details not just a product name. Customs authorities require clarity on how a product is preserved (e.g. frozen, dried, pickled), what it contains (especially for composite goods like ready meals), and how it’s packaged (retail vs bulk), as each factor can alter the tariff heading or impact duty rates. Without this level of detail, businesses are left guessing and that’s when misclassification happens.

The bottom line really is if you’re relying on manual lookups, legacy spreadsheets, or incomplete supplier product data, you’re exposing every shipment you make to the risks of misclassification. In 2026, can you business afford to do that?

The business impact: Lost margins, hidden costs, and compliance exposure

Misclassification affects more than just duty payments, its consequences ripple across your organisation:

Eroded margins: Overpaid duties eat into profits. Across large product portfolios, even a small error rate can add up to hundreds of thousands in lost revenue.
Higher administrative costs: Teams spend excessive time tracking down errors, auditing manually, and managing supporting documentation.
Increased regulatory scrutiny: Customs authorities flag inconsistent classifications for deeper review, raising your compliance risk.
Threats to trusted trader status: Systemic inaccuracies can jeopardise designations like Authorised Economic Operator (AEO).

The solution: Accurate classification from day one with TariffTel

TariffTel was built with one mission: to ensure tariff codes are right the first time, every time. For large or growing businesses, the same philosophy applies.

Here’s how we support British businesses like M&S Food with their classification.

99.9 % Tariff code accuracy

Our platform dramatically reduces misclassification risk, helping you avoid overpaid duties and protect profit margins that manual or outdated systems miss.

A centralised source of truth

Instead of juggling spreadsheets or supplier notes, TariffTel brings product details, images, documentation, and classification rationale into one secure, searchable system making classification audit‑ready.

Built‑In audit trails

Every classification is backed by documented reasoning and aligned with the latest tariff updates, including the General Rules for Interpretation (GRIs) and Explanatory Notes so you’re always prepared for customs reviews.

Supported by customs experts

TariffTel isn’t just software — it combines powerful automation with real customs classification expertise. For edge cases and complex product types, our experts are there to guide you. No guesswork. Just confidence in every code.

Classification in just 3 clicks

Speed matters. With TariffTel, classification doesn’t just become more accurate, it becomes faster. Our intuitive interface lets you classify goods in just three clicks, streamlining your workflow and eliminating the need for lengthy manual lookups.

Misclassified tariff codes are quietly costing businesses millions in overpaid duty, compliance risk, and operational inefficiencies. TariffTel helps you get it right from the start, combining expert-backed accuracy, audit-ready documentation, and quick classification in just three clicks.

Want to hear more? We’re here to help.