Can customs legally do this?

E15Kris

Hi Everyone?

I purchased an electrical item within the EU about a year ago and paid VAT on it at the time. It recently started playing up so I contacted the manufacturer in Canada and they said that if I send it back to them, they will send me out a replacement unit. This I did and they sent me a replacement unit.

Despite it being clearly marked as a warranty/repair, customs proceeded to charge me a total of £25.91 in import/admin duties. I called customs and pointed out to them that this item was under warranty and returned for repair and they informed me that the reason I am being charged is because the manufacturer sent me a replacement item as opposed to the unit I sent to them.

According to customs, under UK law, if I send an item back for repair which I have already paid UK VAT on and they send me the identical unit back, I am not due any customs charges. However, if I send an item back for repair which I have already paid UK VAT on and instead of the manufacturer sending me my repaired unit back, they replace it with an identical, albeit new machine, they are entitled to charge me customs fees on this.

I am really having a tough time believing that UK customs can legally do this as this is theft of my money by the UK Government in the most blatant, yet dishonest way. Does anyone else know anything more about this?

Kris

peter_the_piper

Can you not ask them for credit of the same amount for the goods going back to Canada?

E15Kris

peter_the_piper wrote: »

Can you not ask them for credit of the same amount for the goods going back to Canada?

Nope. They said that as the manufacturer replaced my item as opposed to repairing it, that they are quite within their legal rights to charge me VAT all over again, even though I have already paid VAT when I first purchased it. I kid you not!

Col7777

I'm not surprised at anything like this, I don't blame you being annoyed, pity the company didn't send you the item as a repaired model instead of stating it was a new one.

esuhl

I found this page on HMRC's website relating to customs duties and VAT. Section 1.5 says that, "The amount of VAT you must pay depends on the value of the goods." This is set out in the VAT Act 1994, Section 21, which says that (in this case) the value of the goods for which VAT is payable is determined using the same rules as for customs duties.

So, back to the HMRC document, section 13.2 says that the customs value of replacement goods is determined by paragraphs 12.1 and 12.2, but "you can ask Customs to amend the customs value of the original shipment in accordance with the contractual arrangements" (my italics).

Section 12.1 indicates that you need to use "method 2" to determine the value of free goods, which says that the value is the same as the original or equivalent item.

Don't take my word for it, but I think this means that you are liable for VAT and duty on both the original and replacement items, but you can ask customs to re-value the original item (to zero, presumably, since it has no value to you and is no longer in the EU).

Strangely, it doesn't say that customs must do anything in response to your request - maybe it depends if they're in a good mood?!

shaun_from_Africa

All of the customs regulations and laws are now covered by an EU publication.

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31992R2913:EN:HTML

The relevant section is Article 155, which if you write to HMRC quoting the bit below, they might refund you.
(I doubt it, but no harm in trying.)

It is para 2 that refers to replacment goods being chargable.

Article 155
1. Replacement products shall have the same tariff classification, be of the same commercial quality and possess the same technical characteristics as the temporary export goods had the latter undergone the repair in question.
2. Where the temporary export goods have been used before export, the replacement products must also have been used and may not be new products.
The customs authorities may, however, grant derogations from this rule if the replacement product has been supplied free of charge either because of a contractual or statutory obligation arising from a guarantee or because of a manufacturing defect.

E15Kris

shaun_from_Africa wrote: »

All of the customs regulations and laws are now covered by an EU publication.

The relevant section is Article 155, which if you write to HMRC quoting the bit below, they might refund you.
(I doubt it, but no harm in trying.)

It is para 2 that refers to replacment goods being chargable.

Thanks very much for that info. Very interesting.