Assistance with VAT on Imported Goods

RFW

martindow said:

I suppose they are competing companies so arranging amongst themselves to set standard charges would be acting as an uncompetitive cartel.  Fedex invoice later as they are aiming at a business market who would expect to be invoiced and pay monthly for all of their imports.  

I do wonder how much they lose out though, as I imagine quite a lot of individuals fail to pay and HMRC will want the tax regardless.  Do Fedex hold parcels and demand fees in advance for addresses where there is a history of money owing?

On the first part they don't know where the charges would be so if they had a handling fee of either a percentage of the HMRC charge or a fixed fee it wouldn't be uncompetitive.

I tend to think that they charge after for other reasons. UPS is far more b2b than FedEx and they ask in advance, as far as I can recall. I can't see how it's remotely possible that they'd be losing out. They don't invoice for a monthly payment, they invoice randomly. I received one almost 3 months after delivery.

martindow

RFW said:

I tend to think that they charge after for other reasons. UPS is far more b2b than FedEx and they ask in advance, as far as I can recall. I can't see how it's remotely possible that they'd be losing out. They don't invoice for a monthly payment, they invoice randomly. I received one almost 3 months after delivery.

My main point was that invoicing individuals after delivery is different from invoicing businesses that regularly receive shipments.  If a recipient doesn't pay the invoice it is probably often too little to be worthwhile Fedex trying to claim it through the courts so they make a loss on those.  HMRC will want the VAT and duty regardless. 

We get threads on here fairly regularly where people are asking do we have to pay these invoices and I suspect a proportion don't.  Fedex presumably regards this as a cost of doing business.

RFW

martindow said:

We get threads on here fairly regularly where people are asking do we have to pay these invoices and I suspect a proportion don't.  Fedex presumably regards this as a cost of doing business.

I don't disagree but given how others do it and that that's a fairly standard process doing it the other way around where they would seem to lose out seems odd. I came to the conclusion some time ago that there must be another reason. Businesses with larger amounts would be sorting out the fees beforehand or using a third party.
It does seem like an entire area that should be looked into by some consumer organisation, it seems rife for abuse were people just pay up because they see "HMRC" attached to something.

Hoenir

RFW said:

martindow said:

We get threads on here fairly regularly where people are asking do we have to pay these invoices and I suspect a proportion don't.  Fedex presumably regards this as a cost of doing business.

it seems rife for abuse were people just pay up because they see "HMRC" attached to something.

The basis on which duty and VAT is calculated and charged on imports is fully documented. Has been for many decades. Easy enough to check the calculation if one understands the process. All the couriers collect is their handling fee. Remainder of the money gets paid over to the HMRC. 

DullGreyGuy

RFW said:

martindow said:

We get threads on here fairly regularly where people are asking do we have to pay these invoices and I suspect a proportion don't.  Fedex presumably regards this as a cost of doing business.

I don't disagree but given how others do it and that that's a fairly standard process doing it the other way around where they would seem to lose out seems odd. I came to the conclusion some time ago that there must be another reason. Businesses with larger amounts would be sorting out the fees beforehand or using a third party.
It does seem like an entire area that should be looked into by some consumer organisation, it seems rife for abuse were people just pay up because they see "HMRC" attached to something.

Different companies do things in different ways, even the same company sometimes do things in different ways depending on a number of variables. 

Dont think it needs a consumer organisation to look into it, I think it requires a mass education program for people that when they buy stuff overseas they are liable for the importation costs. In the 90s few consumers did it, in the 00s/10s it increased signifncantly but a decent proportion was from the EU and so pre-brexit it made no difference. 

Now we have the gift of Brexit so more places now trigger importation processes, we continue to buy more and more online but more and more companies now think about selling to people outside their country. 

It's very common on here that people have to explain that a .co.uk domain doesn't automatically mean it's a UK based company. Even if they operate in the UK it doesn't guarantee that their goods are dispatched from the UK

RFW

DullGreyGuy said:

Different companies do things in different ways, even the same company sometimes do things in different ways depending on a number of variables. 

Dont think it needs a consumer organisation to look into it, I think it requires a mass education program for people that when they buy stuff overseas they are liable for the importation costs. In the 90s few consumers did it, in the 00s/10s it increased signifncantly but a decent proportion was from the EU and so pre-brexit it made no difference. 

Now we have the gift of Brexit so more places now trigger importation processes, we continue to buy more and more online but more and more companies now think about selling to people outside their country. 

It's very common on here that people have to explain that a .co.uk domain doesn't automatically mean it's a UK based company. Even if they operate in the UK it doesn't guarantee that their goods are dispatched from the UK

That's about to kick in with Northern Ireland too which should be interesting.

I'm clearly in a minority but I do think some courier companies use it to their advantage. I'm sure mistakes will be made even if there isn't anything nefarious going on.

DullGreyGuy

RFW said:

DullGreyGuy said:

Different companies do things in different ways, even the same company sometimes do things in different ways depending on a number of variables. 

Dont think it needs a consumer organisation to look into it, I think it requires a mass education program for people that when they buy stuff overseas they are liable for the importation costs. In the 90s few consumers did it, in the 00s/10s it increased signifncantly but a decent proportion was from the EU and so pre-brexit it made no difference. 

Now we have the gift of Brexit so more places now trigger importation processes, we continue to buy more and more online but more and more companies now think about selling to people outside their country. 

It's very common on here that people have to explain that a .co.uk domain doesn't automatically mean it's a UK based company. Even if they operate in the UK it doesn't guarantee that their goods are dispatched from the UK

That's about to kick in with Northern Ireland too which should be interesting.

I'm clearly in a minority but I do think some courier companies use it to their advantage. I'm sure mistakes will be made even if there isn't anything nefarious going on.

Just look at all the threads on here from people saying they've received their goods but are refusing to pay the taxes... HMRCs got its money, the couriers need to cover it somehow. Undoubtedly part of the calculation of what their fee should be. 

The errors I've had, get dozens of overseas parcels a year, were all because of errors of the senders not the courier.

There are many things promoted on this forum about avoiding your liabilities etc, it's the consumers who pay their dues that are the ones that carry the cost. 

RFW

DullGreyGuy said:

Just look at all the threads on here from people saying they've received their goods but are refusing to pay the taxes... HMRCs got its money, the couriers need to cover it somehow. Undoubtedly part of the calculation of what their fee should be. 

The errors I've had, get dozens of overseas parcels a year, were all because of errors of the senders not the courier.

There are many things promoted on this forum about avoiding your liabilities etc, it's the consumers who pay their dues that are the ones that carry the cost. 

Slightly off at a tangent but some couriers make it easier to not pay tax than others. I used to deal with a company in China and they had a list of different couriers they used, there was a scale of declarations of order value that they used for couriers. I can't remember the exact details but one courier was much easier to end up with no tax bill, I won't name them but they still very much exist.
I've not imported anything significant for a few years but I do know it's not as straightforward as it should be.

DullGreyGuy

RFW said:

DullGreyGuy said:

Just look at all the threads on here from people saying they've received their goods but are refusing to pay the taxes... HMRCs got its money, the couriers need to cover it somehow. Undoubtedly part of the calculation of what their fee should be. 

The errors I've had, get dozens of overseas parcels a year, were all because of errors of the senders not the courier.

There are many things promoted on this forum about avoiding your liabilities etc, it's the consumers who pay their dues that are the ones that carry the cost. 

Slightly off at a tangent but some couriers make it easier to not pay tax than others. I used to deal with a company in China and they had a list of different couriers they used, there was a scale of declarations of order value that they used for couriers. I can't remember the exact details but one courier was much easier to end up with no tax bill, I won't name them but they still very much exist.
I've not imported anything significant for a few years but I do know it's not as straightforward as it should be.

Can only comment for the couriers that operate in the UK and assuming the seller is both honest and accurate in completing the declaration then I've seen no material difference between the couriers. Each has charged me to the penny what the VAT and Duty was supposed to be and whilst the fee varies a little it was inline with their stated fees. 

PF annoy me because they hold your parcel until you pay but I've found them very bad at actually informing you that you have anything to pay. My last import from them was stuck just after customs for 3 days, called them, they said they were awaiting payment, paid online. Parcel arrived next day and 2 days after that a letter arrived dated the day after the parcel landed in the UK asking for payment. 

I can't remember the courier but ordered a fountain pen from Japan and was surprised that even before the parcel had got to Tokyo airport I had an email to pay the taxes. 

Have known plenty of sellers offering to mark things as a gift, commercial samples or say the value was under £20 (before the VAT changes) but that then gets messy when the parcel doesn't arrive. 

My professional life is insurance so not something couriers are involved in

RFW

DullGreyGuy said:

Can only comment for the couriers that operate in the UK and assuming the seller is both honest and accurate in completing the declaration then I've seen no material difference between the couriers. Each has charged me to the penny what the VAT and Duty was supposed to be and whilst the fee varies a little it was inline with their stated fees.

Have known plenty of sellers offering to mark things as a gift, commercial samples or say the value was under £20 (before the VAT changes) but that then gets messy when the parcel doesn't arrive. 

This is a big courier that operates in the UK. As I say I've not used the company for a few years so don't know if it still goes on. The Chinese company knew that this courier was easier than others to either undervalue or mark as a gift. It wasn't even anything underhand it was quite clear on their checkout page.

It probably helped that it was often high value goods in quite a small box and nothing electrical.

When I get a chance I'll check if they still do it.