Customs Duty + VAT on pre-'50% off sale' cost? 13 July 2020 at 8:58AM in Consumer Rights 9 replies 211 views

saramurphie

I recently bought three dresses from a little shop in the US.  They're quite pricey dresses (they're beautifully tailored, I have one I bought when I was on holiday a few years back), but they were significantly (over 50%) discounted in a sale, hence why I was able to treat myself.  I've recently had the dreaded parcelforce letter demanding payment for customs duty and import VAT, and it is gouging!  I've calculated that they've charged me VAT at almost 27%, and customs duty at over 14%.  The combined amount is almost half as much again as what I spent on the dresses!  I can only assume that what has happened here is that the sender (boutique) has filled in the form with the pre-sale dress price, and this is why I am being charged both duty and VAT at such a punitive rate (or rather, I'm probably being charged both these things at the 'normal' rate, but on an amount that's almost twice as much as what I actually spent).  I did a back of the postage stamp calculation (dresses + postage) of what I thought I'd be paying in these charges before buying the dresses, but this is way more than I anticipated - it almost completely negates the sale discount, and I wouldn't have bought them had I known.  My question is, do I have a case here to claim back the difference from HM R&C via their claim forms?  I can show what I *actually* spent on the dresses, as I have both the itemised receipt from the boutique and the paypal receipt.  Will they accept that, or will they say I have to pay the full whack on the pre-sale price of the dresses, even thought this is NOT what the seller charged me for them, and NOT what I paid?  

Sandtree

How much were the dresses pre and post sale? Are they made of anything special like silk that may mean they get a different commodity code
How much was postage/insurance?
What are the charges you are being presented with? Have to factored in the Parcelforce clearing fee?

You can contest the fee after paying using https://www.gov.uk/government/publications/vat-customs-dutyimport-vat-relating-to-imports-by-post-bor286

unholyangel

Do you still have the packaging the dresses arrived in? If you have that and the invoice showing the price you actually paid, you can be refunded on the tax charges. You won't get a refund of the handling fee though, even if the correct value meant vat shouldn't have been charged

saramurphie

They were around $220 pre sale, and $120 each post sale.  Not sure about the commodity codes as I haven't got the parcel yet!  Postage was $20.  I wasn't charged for insurance.  
I'm not including the Parcel Force £12 flat clearance fee in my analysis, as that is what it is.  
However, the total I paid was just over £300, and I'm being charged is £44.36 customs duty and £82.80 import VAT!
My question was more whether contesting the fee is worthwhile - i.e. will HM C&R accept that they should only be charging me VAT on the cost of the dresses  (i.e. what I actually paid), not the pre-sale total price which I assume is what the sender (boutique) put on the form, hence the massively inflated charges!  Or will they say: tough?  It seems really unfair, as if I bought a dress on sale in, say, Next, I would only be paying VAT on the sale price, not VAT on the original price!!

Sandtree

The seller hasn't put the pre-sale price on it as 3 dresses at $220 plus P&P would be over £100 of VAT.

But yes, as you will note on the form, you have to send proof of what you actually paid for them and so if the merchant has made a mistake and overstated the price or quantity on the form then it can be corrected

Keep_pedalling

I believe customs duty on dresses is 12% which should be around £36. VAT @20% £67 (don’t forget VAT is charged on import duty as well)

unholyangel

saramurphie said:

They were around $220 pre sale, and $120 each post sale.  Not sure about the commodity codes as I haven't got the parcel yet!  Postage was $20.  I wasn't charged for insurance.  
I'm not including the Parcel Force £12 flat clearance fee in my analysis, as that is what it is.  
However, the total I paid was just over £300, and I'm being charged is £44.36 customs duty and £82.80 import VAT!
My question was more whether contesting the fee is worthwhile - i.e. will HM C&R accept that they should only be charging me VAT on the cost of the dresses  (i.e. what I actually paid), not the pre-sale total price which I assume is what the sender (boutique) put on the form, hence the massively inflated charges!  Or will they say: tough?  It seems really unfair, as if I bought a dress on sale in, say, Next, I would only be paying VAT on the sale price, not VAT on the original price!!

They've charged VAT & duty on the USD price, I would assume based on the info above. 

saramurphie

Thanks everyone; it sounds from your responses that I will be able to get a rebate of £30 or so, so once the package has arrived and I have all the info I will apply for some of the charges back.  

saramurphie

unholyangel said:

They've charged VAT & duty on the USD price, I would assume based on the info above. 

The parcel arrived today and this is exactly what they've done - either assumed a 1:1 exchange rate(!) or decided the price on the front is in sterling even though it's clearly marked as USD!  I shall apply for a (partial) refund.  A bit worrying though - surely nearly every parcel that gets customs charges has the value in a non-UK currency on the front, so you think they'd gave got better at conversion.  The fact they haven't bothered suggests some shady behaviour on their part.  I mean, what would they do if someone buys something in, say, Thai baht which is currently 39 to the the pound?  Charge VAT at 25000%!?!

Sandtree

I would personally have a little more compassion than assuming fraud.

Never been in a customs clearing operation nor have any stats on the volumes but just logically the through put must be massive. My ex used to work for directory enquiries and their target was 5 seconds per call (the salutation and call ending were electronic) and she also worked in a sorting office where the time to read and type a postcode was about 1.5 seconds... the jobs have massive turnover because most cannot hit the volumes but it is inevitable when you're asked to do so much so quickly that errors are occasionally made.

Now maybe Parcel Force have 20,000 people dealing with customs clearance and so have plenty of time to read, do data entry, have a peer review to spot for errors etc but my bet is that its closer to a sweatshop