DHL Customs Duty / VAT Invoice after delivery for PPE

Jones578

Sorry for starting a new thread. I know there are a couple of existing threads on here about DHL custom charges, but I couldn't find a thread that is similar to our situation...

Long story short. My wife is a NHS doctor and we were originally from Hong Kong. As the COVID-19 cases soared in the UK and the NHS couldn't provide sufficient PPE to their staff, some of our HK friends really concerned about us and sent us some surgical masks in late April. DHL delivered the package to us without any issues.
However, 2 weeks after the delivery, DHL sent us a 'Customs Duty / VAT Invoice', asking for a charge of £19.75 (which comprised a customs charge of £8.75 that they should have paid on our behalf, as well as their own 'disbursement' of £11.00).

My wife suggested to just pay for it, but I felt it is so wrong in so many levels (Why did DHL not ask us before they decide to pay for the VAT? How did DHL make up their £11 disbursement? Why did DHL not inform our friend about this potential custom charge when they accepted the parcel in HK?).

How likely we can dispute it? Is there any template letter that I may use? Does the fact that these surgical masks were sent as a gift (which is clearly stated on the parcel declaration form) affect anything?

I understood that HMRC has since made all PPE imports VAT free from 1 May. However, our masks landed in the UK on 28 April, so it just did not apply to our case.

DoaM

Customs charges are the liability of the importer (receiver), unless the exporter (sender) handles them at source.

DHL (like most* couriers) provide customs clearance for a nominal fee (£11 in this case) so that the goods don't get held up. Other people have queried this methodology on the basis that the recipient (if not expecting the delivery) had no opportunity to make their own customs clearance arrangements, and had no contract with the courier for them to do this on the recipient's behalf. Bottom line though ... VAT and customs charges will apply anyway (depending on the declared value of the package, including shipping), so you're only really arguing about their handling fee.

* If this package had come via Royal Mail / Parcelforce then the goods would have been held at their storage premises until the recipient paid the customs charge plus handling fee - no pay, no delivery.

shaun_from_Africa

Jones578 said:
Does the fact that these surgical masks were sent as a gift (which is clearly stated on the parcel declaration form) affect anything?

Gifts are only exempt from VAT if they are under £39 in value (and as the VAT levied was £8.75, this would indicate that the value was above this).
What was the true value of everything that was sent?

Jones578

shaun_from_Africa said:

Jones578 said:
Does the fact that these surgical masks were sent as a gift (which is clearly stated on the parcel declaration form) affect anything?

Gifts are only exempt from VAT if they are under £39 in value (and as the VAT levied was £8.75, this would indicate that the value was above this).
What was the true value of everything that was sent?

Thanks, the surgical masks were 400 HKD (as stated in the declaration form), that should be approximately £40.40 and made it just above the limit then...
The DHL invoice stated our parcel value was somehow £43.77 and worked out the 20% VAT to be £8.75. I assume that is because they used a very poor exchange rate.

Thanks for the information anyway.

I suppose there's not much we can dispute about and should just pay for it then?

DoaM

I'm not 100% but I think the customs/VAT charge is levied based on the whole consignment cost, including shipping, not just the declared value of the goods. If not then they may have used the relevant buy/sell rate for converting HKD to GBP ... when you do currency conversion you don't get the rate Google shows, there's a spread rate depending on whether the company is buying or selling currency.

mattyprice4004

DoaM said:

I'm not 100% but I think the customs/VAT charge is levied based on the whole consignment cost, including shipping, not just the declared value of the goods. If not then they may have used the relevant buy/sell rate for converting HKD to GBP ... when you do currency conversion you don't get the rate Google shows, there's a spread rate depending on whether the company is buying or selling currency.

You are correct - the calculation is on the whole amount including shipping which explains the slightly higher amount. 

Unfortunately the system in place for imports is there purely for the end receiver's benefit - if they don't want this done, the sender needs to write 'goods to be customs cleared by importer' on the package. 
The process is very arduous - believe me, if you went through it end-to-end you'd wonder why you didn't just pay £11. 

Personally, as someone who has to customs clear parcels manually as part of their job I think £11 is terrific value for money, not to mention the fact the parcel doesn't get held up in the first place while payment is arranged. 

Pay the amount, be thankful you avoided a stack of annoying paperwork (and you wouldn't have received the goods for weeks, which would have significantly affected you if they were needed urgently) - all for the price of 3 pints. Bargain!