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Your Guide to Commercial Invoices
If you want to ship goods internationally then you’re going to need a commercial invoice.
They might not be the most exciting document but they are crucial if you are moving shipments in and out of the UK.
What is a Commercial Invoice?
A commercial invoice is an export document that serves as legal evidence of a sale transaction between the buyer and the seller. It is mainly used for clearance purposes with regard to customs and helps in the determination and assessment of duties and taxes payable.
Why are they so important?
A commercial invoice is essential for international freight as they are legally binding customs documents.
You will need an individual commercial invoice for every international consignment, and must include important information about the goods, shipping and duty, as well as the importer and exporter.
The customs authorities use these to assess whether the goods on the consignment are allowed to be exported, are under any controls (such as plant-based goods or phytosanitary checks) and which duties or taxes are due.
What information do you need to include?
- Description of goods
- Commodity code on each line
- Commodity Country of Origin (COO)
- Quantity of goods
- Net and Gross Weight, per line
- Value per line, total – no product can have zero value
- Ideally there should be a break down per commodity code, including:
- Net and gross weight
What happens if something is missing or incorrect?
This is very common and mistakes do happen.
If information is missing, or incorrect codes are used, it should get picked up during checks along the way but these things do get missed and can cause delays with your shipments.
Our free Customs Cleanse check can help spot if you have used incorrect HS codes or missing REX numbers in the past and see if HMRC may be owe you a refund…
Don't let customs slow you down
At Baxter Freight, our Customs Team are working around the clock, proactively checking that our customer’s commercial invoices and documents are spot on!
Not only does this keep your paperwork in check but it also helps to avoid delays at borders and keep your goods moving.
Could you be owed a refund?
When it comes to Commercial Invoices, mistakes can happen…
Many UK companies have been using incorrect HS codes for their exports – it’s easy to do!
This may have led to incorrect duty payments and you may be owed a refund.
In partnership with Gerlach, our Customs Cleanse solution can check back three years and see if you have a claim.
Frequently Asked Questions
The business selling the goods, or the exporter must be the one to create the commercial invoice.
A commercial invoice can serve as a contract with the buyer for payment terms, the same as a regular invoice. If you issue one to a customer, it will be considered a payment request.
However, it will include extra details which are specific to international shipping.
Although there are a lot of similar information on these documents, they are not considered the same.
Both have details and descriptions of the products on the consignment, but the purpose of the packing list is to check that the right goods have been loaded and received by the customer.
A commercial invoice contains a declaration of the value of the goods which is used to calculate how much duty or tax is due. So, if you accidentally shipped the wrong amount this calculation will be wrong.
Customs authorities can impose fines for this, so you don’t want to do this often.
If you send another delivery to make up the order, you still need to declare the value of the replacement goods. You now need to add notes to the new invoice to declare that these goods are a replacement for missed goods and state the original tracking number.
If you want to correct a product shortage, then you need to use a duty tax dispute form. Most carriers can do this on your behalf. Any refunds would be issued to the business detailed on the incoterm used e.g., with Delivered Duty Paid the money goes back to the shipper.
All export goods need a harmonised system or HS code which you can look up here. It would be best if you have an experienced member of staff or even an experienced logistics company that could double-check these.
If your goods have the wrong classification, the customs clearing agent will spot it and ask you to change it. The problem could be that this changes the amount of duty due to pay and you may have charged the customer incorrectly.
Get in touch
If you need support with your customs processes – we’d be happy to help!