FEDEX IMPORT DUTY Invoice

mrjermaineh

Hi all, I hope you can help me understand.
I was sent some warranty parts free by an audio equipment company in Germany. It was very difficult to source in UK and due to this, they decided to send them free directly. The information shows the customs value as 22 euros on their paperwork and states they are a free of charge replacement. I have now received an invoice from FedEx for the following
£18.63  - VAT ITEM
£5.59 - DPC
£1.12 -VAT
£25.34 - NET

I have been sent something free and now having to pay more for the actual cost of the item. 

TIA

MattMattMattUK

mrjermaineh said:

Hi all, I hope you can help me understand.
I was sent some warranty parts free by an audio equipment company in Germany. It was very difficult to source in UK and due to this, they decided to send them free directly. The information shows the customs value as 22 euros on their paperwork and states they are a free of charge replacement. I have now received an invoice from FedEx for the following
£18.63  - VAT ITEM
£5.59 - DPC
£1.12 -VAT
£25.34 - NET

I have been sent something free and now having to pay more for the actual cost of the item. 

TIA

Yes, because you imported it. 

By the look of it the item value (which also includes shipping cost) was £93.15, hence the VAT of £18.63, there was then a processing charge and the VAT on that. Just stating that the replacement is free of charge on the paperwork does not mean that VAT is not applicable or charged, the sender has to follow a special procedure.

https://www.gov.uk/guidance/apply-to-pay-less-duty-on-goods-you-export-to-process-or-repair

visidigi

If you tell the shipper what's happened they might be able to sort it out with FedEx in Germany.

Hoenir

The goods had a value. Import duty is payable. The German company has simply passed the cost burden onto you. 

Hoenir

visidigi said:

If you tell the shipper what's happened they might be able to sort it out with FedEx in Germany.

Courier acts for HMRC in the UK. 

visidigi

Hoenir said:

visidigi said:

If you tell the shipper what's happened they might be able to sort it out with FedEx in Germany.

Courier acts for HMRC in the UK. 

No, the courier acts for the importer. They transact with HMRC, but they do not act for them.

The amount of money being asked for here is 100% now due to FedEx, as then have already paid HMRC/Customs, so as long as they get paid by shipper or recipient then they are satisfied.

FedEx has paid the amount they are asking the OP for, if the shipper is willing to absorb the cost FedEx will have it invoiced to them and therefore FedEx will stop asking the recipient to pay.

Hoenir

visidigi said:

Hoenir said:

visidigi said:

If you tell the shipper what's happened they might be able to sort it out with FedEx in Germany.

Courier acts for HMRC in the UK. 

No, the courier acts for the importer. They transact with HMRC, but they do not act for them.

They provide customs agency services for the HMRC.  

user1977

Hoenir said:

visidigi said:

Hoenir said:

visidigi said:

If you tell the shipper what's happened they might be able to sort it out with FedEx in Germany.

Courier acts for HMRC in the UK. 

No, the courier acts for the importer. They transact with HMRC, but they do not act for them.

They provide customs agency services for the HMRC.  

Aren't they acting as agent for the importer?

visidigi

Hoenir said:

visidigi said:

Hoenir said:

visidigi said:

If you tell the shipper what's happened they might be able to sort it out with FedEx in Germany.

Courier acts for HMRC in the UK. 

No, the courier acts for the importer. They transact with HMRC, but they do not act for them.

They provide customs agency services for the HMRC.  

Sorry but they do not. The customs agency exists without FedEx - FedEx provides clearance brokerage services for its customers.

FedEx are providing importation services to the importer, either the recipient of the goods, or alternatively the importer of record as provided by the shipper for the purposes of clearance.

That is the reason why FedEx does clearance using deferment accounts - and if HMRC requires an inspection FedEx has to present the goods to the clearance officer for importation clearance of the goods.

So in this scenario - the OP can ask the shipper to speak to FedEx Germany and pay, because clearance is already complete, FedEx has provided clearance brokerage to the recipient as instructed, in this case, by the shipper when they completed the shipping paperwork - which FedEx calls an Air way bill which is cross referenced on the invoice data which FedEx presents to HMRC to complete clearance.

Hoenir

I think you'll find that the exporter in this instance has provded the goods FOC. The importer consequently still picks up the tab. The goods have a commercial value irrespective of whether any consideration was paid. 

visidigi

Hoenir said:

I think you'll find that the exporter in this instance has provded the goods FOC. The importer consequently still picks up the tab. The goods have a commercial value irrespective of whether any consideration was paid. 

The shipper puts the Incoterms on the package - the shipper also tells FedEx based on those terms, who to collect the duties from. The shipper can offer to pay this, by speaking to FedEx, at this point clearance is complete, this is no longer a clearance issue, but a outstanding balance issue and FedEx won't care who pays it as long as they get it.