If you've ever imported goods into the UK, you've probably come across terms like MRN, EORI, CPC, or Commodity Code and wondered whether you needed a customs degree just to understand them.
The reality is much simpler.
Customs clearance has its own language, and understanding the most common terms can save you time, reduce delays, and help you avoid costly mistakes. Whether you're importing your first shipment or regularly moving goods into the UK, this glossary will help you understand the terminology you'll encounter throughout the customs process.
Why Understanding Customs Terms Matters
Many customs delays aren't caused by missing goods. They're caused by misunderstandings.
Using the wrong customs procedure, incorrect commodity code, or incomplete documentation can result in:
Shipment delays
Additional storage charges
Customs inspections
Unexpected duty or VAT
HMRC queries
Knowing the meaning behind these common terms helps you communicate better with freight forwarders, customs brokers, shipping lines, and HMRC.
Declaration and Entry Terms
Customs Declaration
A customs declaration is the official information submitted to HMRC before goods can enter or leave the UK. It tells customs exactly what the shipment contains, where it originated, its value, and what duties or taxes may be payable.
Without a valid customs declaration, goods cannot be legally imported or exported.
Entry
An Entry is simply another term for a customs declaration.
Each declaration receives its own reference number after being submitted to HMRC.
MRN (Movement Reference Number)
The MRN is a unique reference generated once a customs declaration has been accepted.
Think of it as your shipment's customs tracking number.
It allows customs authorities, ports, and logistics providers to identify your declaration throughout the clearance process.
EORI Number
An Economic Operators Registration and Identification (EORI) number identifies businesses that trade internationally.
If you're importing goods into the UK, you'll normally need a UK EORI number before customs declarations can be submitted.
CDS (Customs Declaration Service)
CDS is HMRC's electronic customs platform.
Importers, exporters, and customs agents use CDS to submit customs declarations electronically.
It replaced the older CHIEF system for UK customs declarations.
CPC (Customs Procedure Code)
A CPC tells HMRC why the goods are entering or leaving the UK.
For example:
Standard import
Returned goods
Temporary admission
Inward processing
Customs warehousing
Selecting the correct CPC is essential because it determines how duties and VAT are treated.
Transit (T1)
A T1 allows goods to move between customs locations without immediately paying import duty or VAT. Payment is deferred until the goods reach their final customs office or warehouse. This is commonly used when goods move from a UK port to an inland customs warehouse.
Document-Related Terms
Commercial Invoice
The commercial invoice is one of the most important customs documents.
It includes:
Buyer and seller details
Product description
Quantity
Unit price
Total value
Currency
Incoterms
HMRC uses this information to calculate customs duties and VAT.
Packing List
A packing list explains exactly how goods are packed.
It typically includes:
Number of cartons
Pallets
Dimensions
Weight
Package contents
Although it doesn't show pricing, it helps customs and warehouses verify shipments.
Bill of Lading (B/L)
A Bill of Lading is the transport document issued by the shipping line for sea freight.
It serves as:
Evidence of shipment
Proof of ownership
Contract of carriage
Without it, cargo often cannot be released.
Air Waybill (AWB)
The air freight equivalent of a Bill of Lading. It contains shipment details, routing information, consignee details, and airline references.
Certificate of Origin
This document confirms where goods were manufactured. Depending on the trade agreement involved, it may allow reduced or zero customs duty.
Duty and Tax Terms
Customs Duty
Customs duty is the tax charged on imported goods.
The rate depends on:
Commodity code
Country of origin
Customs value
Applicable trade agreements
Import VAT
Import VAT is usually charged when goods enter the UK. Many VAT-registered businesses use Postponed VAT Accounting (PVA) to declare import VAT on their VAT return instead of paying it immediately.
Customs Value
Customs value is the amount HMRC uses to calculate duty.
It may include:
Cost of goods
Freight charges
Insurance
Other transport costs
Deferred Payment
Instead of paying customs charges immediately, businesses with a duty deferment account can pay HMRC at a later date. This helps improve cash flow for regular importers.
Tariff Classification Terms
HS Code
The Harmonized System (HS) is the international product classification system used by customs authorities worldwide. It provides a standard way to identify products globally.
Commodity Code
In the UK, imports are classified using a 10-digit Commodity Code.
The commodity code determines:
Duty rate
VAT treatment
Licensing requirements
Import restrictions
Required documentation
Choosing the wrong commodity code can result in incorrect duty payments or HMRC compliance issues.
Tariff
The tariff is the official schedule showing:
Duty rates
Commodity classifications
Import controls
Licensing requirements
Importers should always verify the correct tariff information before shipping goods.
Port and Border Terms
Border Force
Border Force is responsible for protecting the UK's borders. Officers may inspect shipments, verify documentation, or examine goods where necessary.
HMRC
HM Revenue & Customs administers UK customs regulations. HMRC processes declarations, collects duties and VAT, and ensures compliance with customs legislation.
Customs Hold
Sometimes shipments cannot be released immediately.
A customs hold may occur because:
Documents require checking
Additional information is needed
Goods have been selected for inspection
Another government department requires clearance
Demurrage
Demurrage is a charge applied when a full container remains at the port or terminal beyond the number of free days allowed by the carrier.
Detention
Detention applies once a container has left the port but hasn't been returned to the carrier within the agreed time window.
Read more: How to Avoid Demurrage and Detention Charges
Examination
An examination means customs officers physically inspect some or all of the shipment. This does not necessarily indicate a problem; many inspections are selected at random or based on risk assessment.
Port of Entry
The Port of Entry is where imported goods first arrive in the UK.
Examples include:
Felixstowe
Southampton
London Gateway
Heathrow Airport
Stansted Airport
Incoterms Relevant to Customs
EXW (Ex Works)
The buyer takes responsibility for almost every transport and customs cost from the seller's premises onward.FOB (Free on Board)
The seller is responsible until goods are loaded onto the vessel. The buyer manages freight, insurance, import clearance, and UK customs charges.CIF (Cost, Insurance and Freight)
The seller pays for transport and insurance to the destination port. The buyer remains responsible for UK import duty, VAT, and customs clearance.DAP (Delivered at Place)
The seller arranges transport to the agreed destination. The buyer usually pays import duty, VAT, and completes customs clearance.DDP (Delivered Duty Paid)
The seller assumes responsibility for nearly all costs, including customs clearance, import duty, and VAT. The buyer simply receives the goods.
Final Thoughts
Understanding customs terminology doesn't just make conversations with freight forwarders easier. It helps you avoid unnecessary delays, unexpected costs, and compliance issues.
Whether you're importing one shipment a year or hundreds each month, knowing the difference between an MRN, a Commodity Code, or a CPC can make the customs clearance process significantly smoother.
Working with an experienced customs clearance partner can also help ensure your declarations are completed accurately, your documents are in order, and your shipments move through UK customs with minimal disruption.
