UPS charging import duty

Xrchris

I am trying to work out if this is correct.
I purchased a cycle trainer from Wahoo which costs £999 including VAT. As Wahoo send all European orders from a warehouse in the Netherlands I checked on the Wahoo website and under the UK section for Taxes and Duties it states that the purchase price includes all taxes and duty. This being the case I decided to make the purchase. 

UPS have now sent me a message stating that I must pay £153.53 Government charges and their £11.50 fee.

I have tried to contact Wahoo but it is impossible to speak with anyone and they use an online ticket system which takes hours for a response. I have received a reply now which says "We have been made aware that several customers are experiencing this with UPS and we are working with our logistics team and the courier to get this resolved ASAP. We want to get your order to you as quickly as you would like to receive it and hope that we will have an update later today."

I have been able to speak with UPS via Twitter and all they can tell me is "According to our records, the sender chose to pay for the transport and have you as the receiver pay for the import fees. The sender paid us for the shipping charges, and they instructed us that you had to pay for the import fees." and then "The pending fee is for the duties and taxes to import the package into the UK; these are calculated by each importing country. If you refuse the package, you should also notify the shipper in the event they decide not to abandon the package" 

Can anybody help me with this and where I stand. Am I being charged twice for VAT? How can I check whether tacxes are actually due? 

Xrchris

Just as an update to the above - I have managed to speak with UPS and they have confirmed that Wahoo have listed the item value as 833 Euros and I am being charged £1.50 customs duty and £152.03 VAT and £11.50 UPS fee. 

This means that I paid 20% VAT on the original purchase and now I am being charged 20% VAT again on the import. UOS said if VAT is included then Wahoo should have stated Free Domicile on the customs declaration.

Can this be correct? Am I really expected to pay two lots of VAT on an item now? 

MattMattMattUK

Xrchris said:

This means that I paid 20% VAT on the original purchase and now I am being charged 20% VAT again on the import. UOS said if VAT is included then Wahoo should have stated Free Domicile on the customs declaration.

Do you actually have an invoice from Wahoo which details a VAT charge, with a UK VAT number? What was the transaction date? I suspect one of three things has happened, the order was taken before the end of the year, but not shipped until after the end of the year, so being caught up with the end of the Brexit transition, that someone ticked the wrong box when booking the consignment with UPS or that they have not updated their pricing post-Brexit Transition to reflect the changes in invoicing and taxation arrangements. 

Xrchris said:

I have tried to contact Wahoo but it is impossible to speak with anyone and they use an online ticket system which takes hours for a response. I have received a reply now which says "We have been made aware that several customers are experiencing this with UPS and we are working with our logistics team and the courier to get this resolved ASAP. We want to get your order to you as quickly as you would like to receive it and hope that we will have an update later today."

The issue is not with UPS, the issue is with Wahoo incorrectly submitting customs information to UPS.

Xrchris said:

Can this be correct? Am I really expected to pay two lots of VAT on an item now? 

Yes and no. UPS can only process the shipment according to the customs documentation they have received, so they have to charge you the VAT. Wahoo should have collected the VAT (transferred it to the UK HMRC) and have correctly declared the goods for customs purposes. Wahoo either need to submit the correct customs documentation to UPS to allow them to deliver the order without charging you the VAT, or they need to allow you to pay the VAT to UPS, but reimburse you accordingly. 

Xrchris

Thanks for your help.

The Wahoo invoice itemises the VAT and also states Wahoo Fitness, UK VAT - 20% - 196 0753 80.

The purchase was made on post 01/01/2021 which is why I checked on their site to see if VAT and duty was included or not. UPS have stated that the documents Wahoo completed state that I am responsible for paying the taxes.

It looks like I will have to pay the £165 and then fight Wahoo to reclaim this? Any idea how I go about doing this or reclaiming the VAT?

MattMattMattUK

Xrchris said:

The purchase was made on post 01/01/2021 which is why I checked on their site to see if VAT and duty was included or not. UPS have stated that the documents Wahoo completed state that I am responsible for paying the taxes.

I suspect that they had not updated their website terms or pricing to reflect the end of the transition, quite a few people will probably face similar issues in the next few weeks and possibly months.

Xrchris said:

It looks like I will have to pay the £165 and then fight Wahoo to reclaim this? Any idea how I go about doing this or reclaiming the VAT?

It will not be you specifically reclaiming the VAT, such as reclaiming that amount. I would speak to them first to find out what their position is as they may agree that they will pay UPS for instance. I think you might have to wait a day or two for the response, hopefully it will not be a fight as they should have recognised figured out how they screwed up so they can rectify it. 

Xrchris said:

The Wahoo invoice itemises the VAT and also states Wahoo Fitness, UK VAT - 20% - 196 0753 80.

There is a slight oddity in that the VAT number is for WAHOO FITNESS LLC, which is registered in the USA not the UK, their UK trading entity is WAHOO FITNESS (UK) LTD, which is a wholly owned subsidiary of the US LLC. With that complication added to the goods being shipped to the UK from the EU, imported to the EU before the end of the Brexit transition and the issues that causes I suspect that they have not been quick enough off the mark to update their website to reflect the new situation. 

Xrchris

Well the delivery is due later today so I will have no option but to pay it as it is impossible to speak with anyone at Wahoo or elicit any kind of response from them.

This is a nightmare.

MattMattMattUK

Xrchris said:

Well the delivery is due later today so I will have no option but to pay it as it is impossible to speak with anyone at Wahoo or elicit any kind of response from them.

This is a nightmare.

UPS will normally deliver without you having paid the VAT invoice, but payment will be required within 14 days, although they may have changed that so check what documentation they have sent you.

Xrchris

Well the UPS guy has been and I showed him my Wahoo invoice confirming I had already paid the UK VAT. He phoned his office and they agreed that he could deliver and I suspect that either this will go back up the chain to Wahoo or I will receive some written request for settlement.  At least I didn't have to pay it today.

I await with baited breath. 

lordgoata

This is confusing me as well. The following link has a lot of information on it, but I am still not clear what applies!
Changes to VAT treatment of overseas goods sold to customers from 1 January 2021 - GOV.UK (www.gov.uk)

I think for you, as the goods imported were over £135, then the old rules apply, namely its your responsibility as the importer. However, that means that if the VAT is still included on the price you paid, you end up paying twice, which is clearly wrong.

For me, I ordered a new PSU from Corsair UK a couple of days ago for £125.99. When I got the tracking number, I saw it was also coming from the Netherlands. The order confirmation email from Corsair, states "Your order includes £21.00 tax", as does the Order page on there website, but there is no invoice as such, no VAT number listed etc. The order arrived today via DHL, and the printed invoice on the box states price £104.99, Freight £0, Insurance £0, Value Add Included £0, Invoice Total £104.99. No where does it mention I actually paid £125.99, nor £21 in tax.

However, because of the change and the fact that the seller has to collect the VAT and not the importer, I guess that is technically correct, as the value of the goods I imported is £104.99, and the £21 tax was paid to Corasir, who I assume then passes it on to HMRC.

But I honestly have no idea, and am half expecting a letter from DHL demanding payments, and I have no opportunity to refuse the order and have it returned now, as I have already received it (not that I had a choice to refuse it with the lockdown rules, as the deliveries are just left!).

MattMattMattUK

Xrchris said:

Well the UPS guy has been and I showed him my Wahoo invoice confirming I had already paid the UK VAT. He phoned his office and they agreed that he could deliver and I suspect that either this will go back up the chain to Wahoo or I will receive some written request for settlement.  At least I didn't have to pay it today.

I await with baited breath. 

I am glad you got a temporary solution, hopefully you can get everything tidied up in a day or two, it should only involve a bit of paperwork on behalf of Wahoo and UPS.

Xrchris

Well I finally had a response from Wahoo as follows:-
"Our logistics team has been working with UPS since this came to light in order to get these orders released and delivered without the customers paying the extra fees UPS were asking for. We have been informed that this should be resolved within the next 24 hours and all orders released to be delivered. In the meantime, I have processed a refund for the initial express shipping fees that you paid and you can expect to receive this in the next 24 hours." Fingers crossed that will be the last of it for me.

I spoke with somebody else making purchases from the EU since Brexit and they stated that their retailer automatically removed the VAT when it was noted as a sale to UK so he expects to pay it upon receipt. 

All I can say to people is, be careful the buying online at present as many supply chains come via warehouses in the Netherlands or Germany and you might find yourself with this kind of problem.