Import Duty Query - FedEx Service Charge
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MaFt
Posts: 25 Forumite
TLDR: FedEx have charged us £12+VAT for a service we never asked them to provide, we have no contract with them and the service they HAVE provided was not carried out correctly. Can we ignore their service charge?
Hi All,
Looking for some advice. We recently ordered some t-shirts from an American YouTuber. It was about $65 in total for 3 shirts plus around $17 for shipping. These were shipped out fairly quickly and FedEx delivered them a few days later.
Around a week or so later we got sent an invoice from FedEx wanting an additional £40 or so for import duty and other fees. This seemed incredibly high compared to the value of 3 t-shirts.
Looking into it on HMRC website (https://www.gov.uk/goods-sent-from-abroad/tax-and-duty) there shouldn't be any duty on the items due to the lower value of them but we are required to pay VAT on the cost of the items and the cost of shipping.
Looking at the rather complicated form they attached, they seem to have used a value of £95 for the shipping to calculate the VAT owed as the copy of the Spreadshirt invoice shows $0.00 for freight - so I assume their system uses a default value of £95. I will be taking this up with them as the VAT on the freight value should be based on the $17 (about £2.80 VAT) and not £95 (£19) so that's already about £16 too much we're being charged. We will contact them about this anyway and provide a copy of the email invoice that shows the shipping amount we paid so it can be corrected.
For the record: I have no problems paying the VAT due on the items. So please do read on:
The main query I have though is that £12+vat of this invoice is for their service charge. Looking on their website they say that they charge this because they are doing us a favour in paying the customs duty up front for us so we can get the item faster but they have to charge a fee for doing this.
Now, we didn't ask for this service to be carried out. We would have happily waited while HMRC requested the import duty/VAT from us. We don't have a contract with FedEx so never agreed for them to carry out this service or agree to any of their fees. So can we pay the rest of the invoice but knock off the service charge for a service we never asked for or agreed to?
Also, the fact that they have incorrectly calculated the VAT amount means that the service we never asked for or agreed to wasn't even carried out correctly - so should we have to pay it?
It seems cheeky to be honest. But I don't know where I stand legally with it. However I suspect that if I refuse to pay their service charge that they will try and baffle me with legal speak about tax and duty and try claim that HMRC will be after me as it's a VAT issue etc etc etc.
Using their logic, would I be within my rights to send them an invoice for £15 for the services I provide for alerting them to an error on their invoice? They didn't ask for me to provide the service and they never agreed to my T&Cs etc. Isn't that just the same as what they're doing? "Hey, we did you a favour, you should pay us!".
Thanks in advance for any advice and apologies that it is a bit long!
Hi All,
Looking for some advice. We recently ordered some t-shirts from an American YouTuber. It was about $65 in total for 3 shirts plus around $17 for shipping. These were shipped out fairly quickly and FedEx delivered them a few days later.
Around a week or so later we got sent an invoice from FedEx wanting an additional £40 or so for import duty and other fees. This seemed incredibly high compared to the value of 3 t-shirts.
Looking into it on HMRC website (https://www.gov.uk/goods-sent-from-abroad/tax-and-duty) there shouldn't be any duty on the items due to the lower value of them but we are required to pay VAT on the cost of the items and the cost of shipping.
Looking at the rather complicated form they attached, they seem to have used a value of £95 for the shipping to calculate the VAT owed as the copy of the Spreadshirt invoice shows $0.00 for freight - so I assume their system uses a default value of £95. I will be taking this up with them as the VAT on the freight value should be based on the $17 (about £2.80 VAT) and not £95 (£19) so that's already about £16 too much we're being charged. We will contact them about this anyway and provide a copy of the email invoice that shows the shipping amount we paid so it can be corrected.
For the record: I have no problems paying the VAT due on the items. So please do read on:
The main query I have though is that £12+vat of this invoice is for their service charge. Looking on their website they say that they charge this because they are doing us a favour in paying the customs duty up front for us so we can get the item faster but they have to charge a fee for doing this.
Now, we didn't ask for this service to be carried out. We would have happily waited while HMRC requested the import duty/VAT from us. We don't have a contract with FedEx so never agreed for them to carry out this service or agree to any of their fees. So can we pay the rest of the invoice but knock off the service charge for a service we never asked for or agreed to?
Also, the fact that they have incorrectly calculated the VAT amount means that the service we never asked for or agreed to wasn't even carried out correctly - so should we have to pay it?
It seems cheeky to be honest. But I don't know where I stand legally with it. However I suspect that if I refuse to pay their service charge that they will try and baffle me with legal speak about tax and duty and try claim that HMRC will be after me as it's a VAT issue etc etc etc.
Using their logic, would I be within my rights to send them an invoice for £15 for the services I provide for alerting them to an error on their invoice? They didn't ask for me to provide the service and they never agreed to my T&Cs etc. Isn't that just the same as what they're doing? "Hey, we did you a favour, you should pay us!".
Thanks in advance for any advice and apologies that it is a bit long!
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1. What you paid for freight is not what it cost the shipper to send - that's like saying if it was free delivery you should pay nothing - its not reflective of reality - and you are wasting your time if you think sending a courier a email to prove what you paid is what it should be based on.
2. The shipper asked FedEx to deliver your order to you deliver duty unpaid (DDUP) as they have set the recipient liable to pay any fees.
3. You didn't ask FedEx to clear it, the shipper did by the instructions on the shipment - the fee for doing so comes as a result of this service being provided.
4. The service charge is actually quite reasonable when you look into how much self clearance would take (in terms of the time, resource and effort you would have to expended to achieve what a professional clearance company does).
5. The value on the shipment, is then added the ACTUAL freight costs paid and the commodity within.
6. Charge them for alerting to a mistake on the invoice? No. Quite frankly that's absurd.
So lets break this down:
$65 for goods - £52 ish at today's exchange
$17 for delivery - £13.50 ish at today's exchange
£65.30.
Now realistically the shipping cost (which FedEx knows when it submits to customs) is likely to be closer to $25-35 - so lets say $30 = £24
£76 for the goods and the shipping.
20% of that - which is the VAT on the goods and the shipping = £15 + handling charge £14.40 = £29.40 owed.
So if they have mis-declared the shipping they will need to review that - but its no where near what you think you should be paying £2.80.1 -
So if they have mis-declared the shipping they will need to review that - but its no where near what you think you should be paying £2.80.
I never said it should be £2.80. I said the VAT on the actual shipping cost should be £2.80 (based on the actual $17) and not £19 (on the fictional £95). There is also the VAT on the goods that needs paying but like I mentioned - that amount is correct and I have no issues with that.
My issue is that their freight charge of £95 seems incorrect. Because if it actually cost FedEx £95 to ship the items then I'm pretty sure that the postage would have been more than $17. So how can they say the freight value was £95?
You argument about free postage doesn't make sense. If it was free postage the company would still have paid an amount for postage to FedEx and that amount should be used. However, for items that cost around $70 to the customer they won't be paying £95 postage on my behalf and giving me it for free.0 -
You argument about free postage doesn't make sense. If it was free postage the company would still have paid an amount for postage to FedEx and that amount should be used. However, for items that cost around $70 to the customer they won't be paying £95 postage on my behalf and giving me it for free.
Its your argument that doesn't make sense. You said you wanted to send an invoice to FedEx to show the freight costs should be $17 because 'that's what you paid'. My point was if you had got free delivery your argument implied you should not have freight included. Which is not the case.
That's not what it cost. You say delivery was in a few days so therefore it was sent priority.
Now if I go to https://www.fedex.com/en-us/online/rating.html and do a new york to london priority shipment for 0.5kg (being kind, FedEx rounds up to nearest half KG) the list price on that service is $131.27 which is £105.63.
So because the shipper didn't declare the actual freight costs (you said invoice was $0.00) it looks like FedEx has used the list rates to calculate your charge.
Therefore this looks to be a shipper error not a FedEx one. You can by all means call FedEx, but if its not their fault they may charge a resubmission fee to customs.0 -
The VAT you're liable for is on the actual price you paid. So send HMRC proof of this (invoice) along with the packaging and they'll refund the excess tax.
HMRC will not refund the service charge though, you would need to argue that with the courier. Who is unlikely to agree to waive it.
The alternative to all of this would have been for you to clear the goods yourself at port.
I've had experiences of this myself and I found they tend to take the $ value declared (which may not be the price you paid) in £. So if $90 declared then £90 is the figure they use.You keep using that word. I do not think it means what you think it means - Inigo Montoya, The Princess Bride0 -
The main query I have though is that £12+vat of this invoice is for their service charge. Looking on their website they say that they charge this because they are doing us a favour in paying the customs duty up front for us so we can get the item faster but they have to charge a fee for doing this.
Now, we didn't ask for this service to be carried out. We would have happily waited while HMRC requested the import duty/VAT from us. We don't have a contract with FedEx so never agreed for them to carry out this service or agree to any of their fees. So can we pay the rest of the invoice but knock off the service charge for a service we never asked for or agreed to?
So how do you see this going?
Carrier uses crystal ball to know you are self clearing, then just sits on your package while you sort it all out. then carries on bringing it to you when duty is paid?0 -
I found this useful https://www.shippo.co.uk/tips-and-tricks/uk-customs-importing/
You can ask the sender to mark the CN22 or CN23 form with "goods to be Customs cleared by the importer"....if they don't mark it clearly it will be dealt with by FedEx, Royal Mail or another by default (it's meant to make it easier for you)0 -
1. What you paid for freight is not what it cost the shipper to send .........
This post is just wrong. Your premise is that the seller is not reflecting his costs. Of course he is, it doesn't matter what the seller charges for P+P (could be zero) it is the whole amount that the OP paid that is important.0 -
nevermind...0
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http://blog.adamowen.co.uk/dont-pay-fedexs-customs-advancement-fees/
Copy the template there but put your own details in. Used it loads of times. Works everytime0
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