Import Duty - Hidden Charges

kwski

I recently bought an item on ebay, to be shipped from Hong Kong. The implications of import tax and VAT were clearly stated, but what was not mentioned was that in addition to the duty, there would be added an £11 minimum charge by UPS for the use of a 'deferment account' to pay HMRC on my behalf.

HMRC website says regular importers can set up a deferment account free of charge, so how does UPS justify such a hefty toll? While £11 won't send me hungry, it nearly doubled my import costs and I'm not the sort to let unfair charges go unchallenged.

Does anyone else have similar experience, or know where to pursue this further?

Many thanks

superscaper

Well your issue is purely with UPS if you want to pursue it through them. For £11 it's not really worth taking it too far in terms of your time. If you want to complain to TS I think that's probably about as far as it's practical to go without cutting your nose to spite your face. These charges are pretty standard practice across all the couriers as far as I know but you've got nothing to lose by complaining. You're unlikely to change the procedures of an entire industry but they may just waive them in your case as a "goodwill gesture" if it's easiest option for them to stop your pestering.

custardy

as ive said on more than one of the numerous threads on this.
why not query HMRC as to why they allow a 3rd party to pay and susequently charge you?
as of yet no one has done this or at last replied back

Brooker_Dave

kwski wrote: »

I recently bought an item on ebay, to be shipped from Hong Kong. The implications of import tax and VAT were clearly stated, but what was not mentioned was that in addition to the duty, there would be added an £11 minimum charge by UPS for the use of a 'deferment account' to pay HMRC on my behalf.

HMRC website says regular importers can set up a deferment account free of charge, so how does UPS justify such a hefty toll? While £11 won't send me hungry, it nearly doubled my import costs and I'm not the sort to let unfair charges go unchallenged.

Does anyone else have similar experience, or know where to pursue this further?

Many thanks

It's a customs clearance fee.

The perils of importation...

JasonLVC

custardy wrote: »

as ive said on more than one of the numerous threads on this.
why not query HMRC as to why they allow a 3rd party to pay and susequently charge you?
as of yet no one has done this or at last replied back

It's not a "customs clearance fee" (as per brooker dave) as in it is charged by HMRC, this fee is usually charged by the delivery firm and is to cover their administration costs in dealing with HMRC.

It is perfectly aceptable within the legislation to appoint an agent to act on your behalf and/or to utilise the services of a freight forwarder/other delivery mechanism. By agreeing to have something delivered you are in effect appointing an agent to act on your behalf - the irony being it is usually the seller who chooses the agent, not the buyer!.

The alternative is to arrange for the importation yourself and then when it arrives dockside in Dover to either go down and pay by cheque yourself and/or then get someone else to pay for you (oops, back to using an agent again) - this is very inconvenient and may cost more than £10 if you don't live in Dover.

A deferment (or SIVA) account is usually only of worth to larger firms who import a lot (like UPS). HMRC do not charge for this facility, but there is a cost to the business in terms of administration, a SIVA account is a bank backed guarantee to HMRC and so reduces the companies ability to borrow money and there will be a charge from the bank for this facility which may run to many thousands of pounds per month if the SIVA account has a high 'guarantee' (ie, a few million quid!).

I agree it is a big scandal as Royal Mail slap a £10 charge on if your item gets picked up by HMRC for import duties but there is little one can do about it other than import personally or kick up enough fuss nationally (Mr Martin lewis, wink, wink) to take the challenge on.

custardy

JasonLVC wrote: »

It's not a "customs clearance fee" (as per brooker dave) as in it is charged by HMRC, this fee is usually charged by the delivery firm and is to cover their administration costs in dealing with HMRC.

It is perfectly aceptable within the legislation to appoint an agent to act on your behalf and/or to utilise the services of a freight forwarder/other delivery mechanism. By agreeing to have something delivered you are in effect appointing an agent to act on your behalf - the irony being it is usually the seller who chooses the agent, not the buyer!.

The alternative is to arrange for the importation yourself and then when it arrives dockside in Dover to either go down and pay by cheque yourself and/or then get someone else to pay for you (oops, back to using an agent again) - this is very inconvenient and may cost more than £10 if you don't live in Dover.

A deferment (or SIVA) account is usually only of worth to larger firms who import a lot (like UPS). HMRC do not charge for this facility, but there is a cost to the business in terms of administration, a SIVA account is a bank backed guarantee to HMRC and so reduces the companies ability to borrow money and there will be a charge from the bank for this facility which may run to many thousands of pounds per month if the SIVA account has a high 'guarantee' (ie, a few million quid!).

I agree it is a big scandal as Royal Mail slap a £10 charge on if your item gets picked up by HMRC for import duties but there is little one can do about it other than import personally or kick up enough fuss nationally (Mr Martin lewis, wink, wink) to take the challenge on.

£8
remember all companies add a charge with RM being pretty much the lowest

Nilrem

iirc DHL still only charge a miserly £1.50 or something for residential customers (and that includes the cost of them sending a letter out), last time I had a charge via DHL the fee was minimum £1.50 or 1.5% whichever was higher.

I don't mind paying customs duty/vat and a reasonable fee, but it is an incredibly stupid situation when on something worth £19 you can pay about 40% of it's value in a handling charge, on top of the vat/duty.

princessflea

I just got stung for £21 on a £25 delivery by FedEx!

custardy

Nilrem wrote: »

iirc DHL still only charge a miserly £1.50 or something for residential customers (and that includes the cost of them sending a letter out), last time I had a charge via DHL the fee was minimum £1.50 or 1.5% whichever was higher.

I don't mind paying customs duty/vat and a reasonable fee, but it is an incredibly stupid situation when on something worth £19 you can pay about 40% of it's value in a handling charge, on top of the vat/duty.

or 2%,whichevers greater.

hangonamo

Nilrem,

If the intrinsic value of the goods(excluding shipping and insurance charges) is less than £18, there should be no duty payable. You can demand the return of both the duty and the deferment fee. (You can quote the first line and tell them that they should have used CPC 40 00 C07 - they will know what you mean, tho as it's UPS they most probably wont !!)The deferment fee is charged for use of their deferment account which they don't have to settle with HM Customs until the 15th of the following month. It's just an easy way of making more money.