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Customs and VAT advice

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Posted 19th Dec 2019Edited by:"toto123"
I have placed an order from US based website.
the total order value was 160 USD after discount (188USD before discount) + free shipping.
I received the order last week from FedEx.
today I received a letter from them asking me to pay the customs (£50 + £12 fedex fees) which I have expected but not that much!
I have no idea why the customs is £50??
based on the amount I paid which is 160USD (£125) customs should be £25
but when I had a look at the invoice I was shocked to see that they have added £105 to the order value calculation which is for freight shipping insurance! why would I pay VAT for shipping insurance?? I even did not pay for shipping as It was free.
and how comes the insurance is £105?
also they put the order value 188USD not 160USD

So, I am seeking your expert advice.
I would like to make a dispute but I do not know if I should make it against the seller or FedEx.
also why fedex did not let me know about these charges before delivering the order? I would never received the order if I knew that I should pay that much!

I have attached a picture of the invoice.

Thanks in advance

3369739-Kj81L.jpg
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You might want to filter the address
MR112319/12/2019 21:45

You might want to filter the address


...for the Fedex building at Stansted Airport.

Don't worry; a Moderator just made the same mistake & I asked for the thread to be reinstated.
@toto123 Nope! I can't see why the £188.50 item value jumped another £39.71, then VAT was added, before the total became £251.73, but that is why the customs charge is £50.34 (20% of £251.73).


I suggest contacting Fedex & asking them to explain it.
fanpages19/12/2019 22:18

@toto123 Nope! I can't see why the £188.50 item value jumped another …@toto123 Nope! I can't see why the £188.50 item value jumped another £39.71, then VAT was added, before the total became £251.73, but that is why the customs charge is £50.34 (20% of £251.73).I suggest contacting Fedex & asking them to explain it.


VAT value is: £251 which is £105 freight insurance + £145 (the order value after currency converting)
I do not understand why the customs value is £228
And I did not pay for freight insurance, I do not have an idea why do I have to pay VAT for it!
toto12319/12/2019 22:37

VAT value is: £251 which is £105 freight insurance + £145 (the order value …VAT value is: £251 which is £105 freight insurance + £145 (the order value after currency converting)I do not understand why the customs value is £228And I did not pay for freight insurance, I do not have an idea why do I have to pay VAT for it!



Ah... sorry, I missed that the 188.50 was USDs. Duh! It's late, etc.

The invoice doesn't say the £105 is for insurance; just "Charges". Insurance is a separate line beneath it.

A 1.224Kg package shouldn't cost £105 to ship.

Rather than trying to second guess this, Fedex is your first, erm, port of call.
fanpages19/12/2019 22:43

Ah... sorry, I missed that the 188.50 was USDs. Duh! It's late, etc. Ah... sorry, I missed that the 188.50 was USDs. Duh! It's late, etc. The invoice doesn't say the £105 is for insurance; just "Charges". Insurance is a separate line beneath it.A 1.224Kg package shouldn't cost £105 to ship.Rather than trying to second guess this, Fedex is your first, erm, port of call.


Yes exactly it's impossible for shipping to cost £105
Other than that the shipping was free and I did not even pay a penny for it.
I will contact FedEx tomorrow.
Thanks a lot
toto12319/12/2019 22:47

Yes exactly it's impossible for shipping to cost £105Other than that the …Yes exactly it's impossible for shipping to cost £105Other than that the shipping was free and I did not even pay a penny for it.I will contact FedEx tomorrow.Thanks a lot



Good luck. I hope Patrycjusz Dziedzinski's English is better than my Polish!
toto12319/12/2019 22:47

...total order value was 160 USD after discount (188USD before discount)


The importer pays tax on the value, not the cost, so the (taxable) value is the value before discount = 188USD.

toto12319/12/2019 22:47

...it's impossible for shipping to cost £105 Other than that the shipping …...it's impossible for shipping to cost £105 Other than that the shipping was free and I did not even pay a penny for it.


It is reasonable to expect the shipper (FedEx) to know how much it may usually charge for its services. Obviously the importer would be deluded to insist that the shipping is free; in reality the cost of the shipping is lost / buried in some other cost, presumably the purchase price, and the supplier likely has some arrangement with the shipper to obtain the shipping at a discount from the standard (ridiculous) charge, but again: the importer pays tax on the (ridiculous) value not the cost.

Be prepared for these assertions when you contact FedEx.
AndyRoyd19/12/2019 23:09

The importer pays tax on the value, not the cost, so the (taxable) value …The importer pays tax on the value, not the cost, so the (taxable) value is the value before discount = 188USD.It is reasonable to expect the shipper (FedEx) to know how much it may usually charge for its services. Obviously the importer would be deluded to insist that the shipping is free; in reality the cost of the shipping is lost / buried in some other cost, presumably the purchase price, and the supplier likely has some arrangement with the shipper to obtain the shipping at a discount from the standard (ridiculous) charge, but again: the importer pays tax on the (ridiculous) value not the cost.Be prepared for these assertions when you contact FedEx.


Thanks for your reply
But do you think it's reasonable that the supplier would pay £105 or lets say they get the shipping discounted by half so £50 .. for a product they sold for £125?
The shipping value on the supplier website was 20USD, but I added extra two items to be qualified for free shipping which was on any order above 150USD. So basically if it costs 20USD, the real value should not exceed double that.
I thought I would save in customs if I get free shipping, it's better if I paid 20usd for shipping that would have saved me some money.
Edited by: "toto123" 19th Dec 2019
toto12319/12/2019 23:42

Thanks for your replyBut do you think it's reasonable that the supplier …Thanks for your replyBut do you think it's reasonable that the supplier would pay £105 or lets say they get the shipping discounted by half so £50 .. for a product they sold for £125?The shipping value on the supplier website was 20USD, but I added extra two items to reach the free shipping offer which was on any order above 150USD. So basically if it costs 20USD, the real value should not exceed double that.


Most peeps would think it unreasonable, but it's not most peeps that you need to convince, it is the shipper / HMRC, and any cost stated anywhere within the purchase chain may not reflect the base cost that the supplier or any other 3rd party may subsequently and / or even routinely heavily discount.
You could risk separately and directly asking Fedex what its base cost would be to ship a box of x mass and y dimensions via the same service that your supplier used, but if that base cost prior to discount is $silly then you may shoot yourself in the foot.
Or it may simply be that there is an error in the documentation, but it would still prudent to consider having pre-prepared credible responses to potential challenges, although not clear what those responses may be.
I paid £16 customs on an envelope the size of a postcard once that was a gift someone sent me, basically isn't ever worth it to order from America anymore because customs have grown so exponentially, 20% is cool but there sure seems to be a lot of extra charges more recently
I had a similar scenario from the US, I usually pay £30 customs on this item, but the company I bought from added a freebie item. Unfortunately the company put a $60 value on that item (it should have been $6 RRP or free! on the customs declaration), this took me over the £135 and then had to pay double my normal fee.
In the end, I didn't pay it and the item went back and got a full refund.
Felicitous20/12/2019 06:59

I paid £16 customs on an envelope the size of a postcard once that was a …I paid £16 customs on an envelope the size of a postcard once that was a gift someone sent me, basically isn't ever worth it to order from America anymore because customs have grown so exponentially, 20% is cool but there sure seems to be a lot of extra charges more recently



On Ebay, there are a lot of US sellers. They quote shipping cost, but it is usually done through a courier USP, Federal Express etc and they always put the full value of whatever it is, so inevitably you end up paying much more.
I wonder they bother. No-one in their right minds would buy from them.
It's bad enough even within Europe on Amazon from other countries. So much for the 'common market' RIP
jasee20/12/2019 07:20

On Ebay, there are a lot of US sellers. They quote shipping cost, but it …On Ebay, there are a lot of US sellers. They quote shipping cost, but it is usually done through a courier USP, Federal Express etc and they always put the full value of whatever it is, so inevitably you end up paying much more.I wonder they bother. No-one in their right minds would buy from them.It's bad enough even within Europe on Amazon from other countries. So much for the 'common market' RIP


i have so many other issues with ebay, tried to contact a seller for a broken item and with ebay's support it took over a week and i was still unable to even message the seller because the site is so broken now, ended up goign through paypal instead after giving up with both ebay's site and phone support when 3 different people couldn't handle damaged items
Felicitous20/12/2019 06:59

I paid £16 customs on an envelope the size of a postcard once that was a …I paid £16 customs on an envelope the size of a postcard once that was a gift someone sent me, basically isn't ever worth it to order from America anymore because customs have grown so exponentially, 20% is cool but there sure seems to be a lot of extra charges more recently



...Wait until we are out of the EU, then we'll all find out how expensive it is to import goods to the UK
fanpages20/12/2019 09:03

...Wait until we are out of the EU, then we'll all find out how expensive …...Wait until we are out of the EU, then we'll all find out how expensive it is to import goods to the UK


fanpages20/12/2019 09:03

...Wait until we are out of the EU, then we'll all find out how expensive …...Wait until we are out of the EU, then we'll all find out how expensive it is to import goods to the UK


the answer is "more".
fanpages20/12/2019 09:03

...Wait until we are out of the EU, then we'll all find out how expensive …...Wait until we are out of the EU, then we'll all find out how expensive it is to import goods to the UK



Felicitous20/12/2019 09:45

the answer is "more".



Sorry... Wait until we are more out of the EU,...
I think it was almost 10 years ago i paid £60 customs on a $340 dollar camera lens.. i thought it was a good deal at the time until I had to pay customs charges. I had to pay the charge before they could release the item.

I did an online calculation of the charges for the item you purchased and it gave me a total of £52 customs charge, so it could possibly be correct.
It's good to see revenue being collected.

Let's hope that they're as vigilant coming up to Christmas.
fanpages20/12/2019 09:52

Sorry... Wait until we are more out of the EU,...


"more expensive"
It hurts when they declare in full.
Ive been lucky twice this year.
An Ipad was marked as $15.00 from a china seller who shall not be named.
A battery tester from Aliexpress this week marked as diagnostic connector $5.00.
Ive been hit hard in the past from Amazon.com ordering Dvd box sets, Now customs is included at point of purchase with Amazon.
US ebay seller will sometimes work around this, but not very often.
punji20/12/2019 09:47

I think it was almost 10 years ago i paid £60 customs on a $340 dollar …I think it was almost 10 years ago i paid £60 customs on a $340 dollar camera lens.. i thought it was a good deal at the time until I had to pay customs charges. I had to pay the charge before they could release the item. I did an online calculation of the charges for the item you purchased and it gave me a total of £52 customs charge, so it could possibly be correct.


Yes I know the custom charge for the total £250 should be £52
But the thing is that I did not pay for shipping, so why shall I pay the vat on shipping which is unreasonably declared as £105?
toto12320/12/2019 10:15

Yes I know the custom charge for the total £250 should be £52But the thing …Yes I know the custom charge for the total £250 should be £52But the thing is that I did not pay for shipping, so why shall I pay the vat on shipping which is unreasonably declared as £105?


Perhaps you can then dispute this with Fedex and show them the invoice you received from the company that should say free delivery or 0.00 that way they'll know they should be calculating shipping in their customs charge?

I think there is a form online you can fill in on the Fedex site, type in dispute customs charge fedex
You need to dispute with HMRC, they have a form, you should be able to provide an invoice and a bank statement showing what you actually paid.
dcx_badass20/12/2019 11:11

You need to dispute with HMRC, they have a form, you should be able to …You need to dispute with HMRC, they have a form, you should be able to provide an invoice and a bank statement showing what you actually paid.


Thanks for your reply. I am going to dispute with FedEx as they have paid the customs on my behalf without me knowing.
It's their problem as they have declared shipping to HMRC while I did not pay for shipping.
toto12320/12/2019 11:23

Thanks for your reply. I am going to dispute with FedEx as they have paid …Thanks for your reply. I am going to dispute with FedEx as they have paid the customs on my behalf without me knowing.It's their problem as they have declared shipping to HMRC while I did not pay for shipping.


Yes it's strange they even released the item without you paying the customs charge. They normally ask at the door when they try to deliver.

And it's bizarre they tell you afterwards, what if you tell them that you was not informed of a duty charge upon delivery and now that you are told afterwards you no longer want the item?
I imported a Fender Telecaster via ebay.com when the pound was worth nearly 2 dollars and the charges were as expected except for a relatively small handling charge for the UK courier.
Seems like another lifetime in terms of the exchange rate.
punji20/12/2019 11:55

...And it's bizarre they tell you afterwards, what if you tell them that …...And it's bizarre they tell you afterwards, what if you tell them that you was not informed of a duty charge upon delivery and now that you are told afterwards you no longer want the item?


Ignorance does not exempt legal obligations. You have option of RTS and claiming tax back via HMRC form xyz, less a processing fee that is probably more than the tax. Then the ignorant will observe "what if I didn't realise there would be a processing fee," and that answer is simple: you're Donald Ducked.
AndyRoyd21/12/2019 01:41

Ignorance does not exempt legal obligations. You have option of RTS and …Ignorance does not exempt legal obligations. You have option of RTS and claiming tax back via HMRC form xyz, less a processing fee that is probably more than the tax. Then the ignorant will observe "what if I didn't realise there would be a processing fee," and that answer is simple: you're Donald Ducked.


I don’t think it is a case of being ignorant, Royal Mail don’t release items unless the duty has been paid. I don’t believe I k own anyone who has an item delivered and then be expected to pay duty without even being informed prior!

And to top it off, they added shipping on top so it increases the duty!
AndyRoyd21/12/2019 01:41

Ignorance does not exempt legal obligations. You have option of RTS and …Ignorance does not exempt legal obligations. You have option of RTS and claiming tax back via HMRC form xyz, less a processing fee that is probably more than the tax. Then the ignorant will observe "what if I didn't realise there would be a processing fee," and that answer is simple: you're Donald Ducked.


I am aware of the expected duty. But for a person who is not paying for shipping because it's free. How could I guess what's the shipping value they put in the invoice?
Why they did not let me know in advance?
I had DHL parcel delivered last year and they texted me before they deliver the parcel to inform me about the tax.
punji21/12/2019 17:17

I don’t think it is a case of being ignorant, Royal Mail don’t release ite …I don’t think it is a case of being ignorant, Royal Mail don’t release items unless the duty has been paid. I don’t believe I k own anyone who has an item delivered and then be expected to pay duty without even being informed prior!And to top it off, they added shipping on top so it increases the duty!


If not ignorant, maybe deluded? It is unrealistic to suggest shipping is genuinely free; it may be not separately charged but are you really suggesting the courier carried and delivered the goods for zero compensation? Of course not; the cost of shipping is simply shuffled elsewhere in the marketing presentation by the merchant. The buyer is expected to be aware of tax obligations prior to purchase; which is full circle back to ignorance does not exempt legal obligations.
AndyRoyd21/12/2019 19:30

If not ignorant, maybe deluded? It is unrealistic to suggest shipping is …If not ignorant, maybe deluded? It is unrealistic to suggest shipping is genuinely free; it may be not separately charged but are you really suggesting the courier carried and delivered the goods for zero compensation? Of course not; the cost of shipping is simply shuffled elsewhere in the marketing presentation by the merchant. The buyer is expected to be aware of tax obligations prior to purchase; which is full circle back to ignorance does not exempt legal obligations.


I do not know who is the ignorant here.

And you even mentioned that the shipping is simply shuffled elsewhere, so basically I have paid for shipping once I placed the order and it was included in the total value which is 188usd. NOT separately.
You did not get the point and just wanted to repeat the ignorant word many times. But please read very well before commenting next time
Edited by: "toto123" 22nd Dec 2019
toto12322/12/2019 00:59

I do not know who is the ignorant here.And you even mentioned that the …I do not know who is the ignorant here.And you even mentioned that the shipping is simply shuffled elsewhere, so basically I have paid for shipping once I placed the order and it was included in the total value which is 188usd. NOT separately.You did not get the point and just wanted to repeat the ignorant word many times. But please read very well before commenting next time


The ignorants appear to ignore the prev mentioned concept of taxable value rather than taxable cost. The cost can be shuffled / hidden anywhere but the residual value does not change. Maybe "read very well" the previous comment that stated "the supplier likely has some arrangement with the shipper to obtain the shipping at a discount from the standard (ridiculous) charge, but again: the importer pays tax on the (ridiculous) value not the cost."
AndyRoyd22/12/2019 02:05

The ignorants appear to ignore the prev mentioned concept of taxable …The ignorants appear to ignore the prev mentioned concept of taxable value rather than taxable cost. The cost can be shuffled / hidden anywhere but the residual value does not change. Maybe "read very well" the previous comment that stated "the supplier likely has some arrangement with the shipper to obtain the shipping at a discount from the standard (ridiculous) charge, but again: the importer pays tax on the (ridiculous) value not the cost."


I don’t think you get what the OP is annoyed about m. The shipping price should not even be listed. The issue is that the shipping cost is written on the invoice which increases duty! Why should the cost of shipping be listed on an invoice if it is FREE.
punji22/12/2019 15:05

I don’t think you get what the OP is annoyed about m. The shipping price s …I don’t think you get what the OP is annoyed about m. The shipping price should not even be listed. The issue is that the shipping cost is written on the invoice which increases duty! Why should the cost of shipping be listed on an invoice if it is FREE.


You may have missed the explanation a few posts back that shipping is not free (even if the letters are capitalised): the shipping cost is simply shuffled eleswhere, plus the discounted shipping cost that the supplier (presumably) buries in the purchase price is not the taxable item, the taxable item is the pre-discounted shipping value that the courier identifies as "freight charges".
But we still don't know if OP has challenged the accuracy of the stated freight charges.
punji22/12/2019 15:05

I don’t think you get what the OP is annoyed about m. The shipping price s …I don’t think you get what the OP is annoyed about m. The shipping price should not even be listed. The issue is that the shipping cost is written on the invoice which increases duty! Why should the cost of shipping be listed on an invoice if it is FREE.


You're incorrect with what you're saying, whether the Op paid a shipping charge or not the courier company/Royal mail charged the seller something to transport from the U.S to the U.k,therefore them putting a shipping value on the invoice is the correct thing to do as customs don't accept "free shipping".

However if the Op paid $188 dollars, or whatever it was, the seller should have included the value of the item and shipping in that price.
I have received a parcel from the States today. It was sent by normal mail and I received it by royal mail. The value was 10 dollars and free shipping (weight is 1kg).
It was delivered today with no additional fees or charges and the value was declared as 10 dollars only.
Of course seller has paid for shipping but only the cost I paid was declared, which is should be the case with the order I am complaining about.
Anyway, I have contacted the supplier and i did not get any response.
Also contacted FedEx and only received a respond saying I should pay the £62 and they send me an email straightaway saying that the case was closed!
How they close the case when I am not satisfied with their response and I have asked for the uk customs paper as I need not see them, not their papers!
In this case I will not pay unless they respond to my emails with detailed explanation why they have declared this ridiculous shipping costs although the purchase invoice was stating 188 dollars only, they got paid for shipping by the supplier not me.
What makes me more annoyed is that I received a parcel today and it was free shipping and there was no shipping addition to the total value.
Edited by: "toto123" 24th Dec 2019
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