First Post Brexit Import - No Import VAT Charged?

Discussion in 'International Business' started by Snufflebean, Jan 8, 2021.

  1. Snufflebean

    Snufflebean UKBF Newcomer Free Member

    10 0
    Hi,

    So I took the plunge and placed an order with my Dutch supplier as they assured me UPS would handle customs clearance and import VAT.

    The package arrived safely with me today, and on the tracking does show that it was released by the customs agency on arrival in the UK. However UPS have not charged me any import VAT, and there were no commercial invoices attached to the parcel.

    My Dutch supplier appears to be as confused with the new rules as many of the rest of us are.

    Do UPS often invoice import VAT after delivery? I was under the understanding they demand payment before delivery.

    I've sent a query to their post clearance dept but wondered if anyone else had encountered anything similar before?
     
    Posted: Jan 8, 2021 By: Snufflebean Member since: Jan 2, 2021
    #1
  2. Mr D

    Mr D UKBF Legend Free Member

    27,991 3,445
    Can get a bill weeks after delivery on occasion.
    Been a while since was last delayed much but can happen.
     
    Posted: Jan 8, 2021 By: Mr D Member since: Feb 12, 2017
    #2
  3. Snufflebean

    Snufflebean UKBF Newcomer Free Member

    10 0
    That’s handy to know, I don’t want to inadvertently commit VAT fraud
     
    Posted: Jan 8, 2021 By: Snufflebean Member since: Jan 2, 2021
    #3
  4. DontAsk

    DontAsk UKBF Ace Free Member

    1,924 306
    After.

    RM and parcel force like to pull that one.

    Makes a total mockery of their supposed 24 or 48 hour priority services when it can take days for the correct reference number (different to the parcel tracking number) to turn up in the post. I once got a total refund of shipping due to the farcical way they work. Basically they take the money for a service they simply cannot fulfil. Rant over, sorry.
     
    Posted: Jan 8, 2021 By: DontAsk Member since: Jan 7, 2015
    #4
  5. Snufflebean

    Snufflebean UKBF Newcomer Free Member

    10 0
    Thanks for the reply, I’ll look out for an invoice from UPS in the coming days then. Google had suggested they like to collect the tax on delivery.

    Parcelforce have advised me they will not submit the C88 on my behalf when it’s needed (?!) so I’m going to avoid using them wherever possible.
     
    Posted: Jan 8, 2021 By: Snufflebean Member since: Jan 2, 2021
    #5
  6. paulears

    paulears UKBF Big Shot Full Member

    4,755 1,282
    UPS have a strange system - they keep delivering to me and if I am in the office, they will only leave the parcels (from china) if I pay before delivery. The system, if they leave you the bill is online, and works fine - then they redeliver next day. Today, they gave me a phone number - the local Norwich office - but they didn't answer - he took a cheque - first one I've written for ages.

    Was the amount low? Sometimes if it is, they don't bother with the billing (and £12 charge) - I've had a couple of parcels, declared value near £200 that had no customs labels, and no invoice ever came. Parcelforce will sometimes invoice after the delivery.
     
    Posted: Jan 8, 2021 By: paulears Member since: Jan 7, 2015
    #6
  7. Snufflebean

    Snufflebean UKBF Newcomer Free Member

    10 0
    It was €300 in value. The delivery driver said he hasn’t had to collect import VAT from a single EU shipment yet. It’s just not what I was expecting, I was geared up for import VAT and an admin charged and I’ve basically had the same delivery I would before brexit. It’s disconcerting.
     
    Posted: Jan 8, 2021 By: Snufflebean Member since: Jan 2, 2021
    #7
  8. paulears

    paulears UKBF Big Shot Full Member

    4,755 1,282
    Maybe its just teething trouble. At some point it has to happen - I wonder if there's just a glitch?
     
    Last edited: Jan 8, 2021
    Posted: Jan 8, 2021 By: paulears Member since: Jan 7, 2015
    #8
  9. 2JP

    2JP UKBF Contributor Free Member

    96 8
    Or nobody has a clue how a package shows if VAT has been obtained at point of sale by foreign seller or needs to be collected as it needs to be charged to the recipient or, for a VAT registered company, if it does not need collecting because they can use reverse charge procedures through their VAT accounting... depending on whether it is under £135 or above it.......

    I get the impression that most courier systems are near breaking point under normal conditions. Given COVID, Brexit, the French and the VAT changes I suspect chaos.

    Just remember the responsibility is on you to correctly account for/pay the VAT (depending if VAT registered or not).
     
    Last edited: Jan 9, 2021
    Posted: Jan 9, 2021 By: 2JP Member since: Dec 10, 2017
    #9
  10. Snufflebean

    Snufflebean UKBF Newcomer Free Member

    10 0
    Yes, and as this is a company purchase by my VAT registered Ltd company I am extremely worried about inadvertently commiting VAT fraud.

    I only was brave enough to even contemplate ordering this soon because both my supplier and UPS assured me they would complete the customs import declaration on my behalf and import VAT would be charged by the courier after this process was completed (much like buying from outside the EU pre-brexit). I'm not able to complete import declarations myself, its just too complex, which is why I made sure the Courier would do it on my behalf before I ordered

    My terms from the supplier are DAP, so they definitely haven't paid the VAT on my behalf.

    I'm querying with UPS to make sure it was cleared properly through customs, and if not I'll be requesting they restrospectively clear and delcare to HMRC so that I'm correctly charged the Import VAT.

    The UPS delivery man did mention he hasn't had a single import VAT demand to collect yet, so maybe its post brexit teething issues.
     
    Posted: Jan 10, 2021 By: Snufflebean Member since: Jan 2, 2021
    #10
  11. 2JP

    2JP UKBF Contributor Free Member

    96 8
    I am not an advisor in any way but so long as you fill in the boxes correctly on your VAT return you would not be committing VAT fraud. Simplistically, the main point of a VAT return for a VAT registered company is that the VAT in and out is assessed and if more VAT has been taken from customers than paid out in purchases then your company owes HMRC the difference. UPS should have performed the import declaration. Hardly anybody remembers that VAT is a consumer tax NOT a business tax. All a VAT registered business has to do is ensure the VAT return is correct.
     
    Last edited: Jan 10, 2021
    Posted: Jan 10, 2021 By: 2JP Member since: Dec 10, 2017
    #11
  12. Snufflebean

    Snufflebean UKBF Newcomer Free Member

    10 0
    thank you, obviously at the moment the EU purchase has been logged as VAT free as I was expecting the VAT to be charged via UPS.

    Will have a chat to my accountant and see what she says, it’s still irked me that all the prep I did researching how the customs process will work for me and who will declare my goods has been a little bit in vain as nothing went to plan! Haha
     
    Posted: Jan 10, 2021 By: Snufflebean Member since: Jan 2, 2021
    #12
  13. 2JP

    2JP UKBF Contributor Free Member

    96 8
    Good idea talking to your accountant.
     
    Posted: Jan 10, 2021 By: 2JP Member since: Dec 10, 2017
    #13
  14. Snufflebean

    Snufflebean UKBF Newcomer Free Member

    10 0
    Update: I phoned the UPS brokerage team and they advised it was incorrectly cleared for delivery, they took my VAT and EORI number and will invoice me at a later date.
     
    Posted: Jan 11, 2021 By: Snufflebean Member since: Jan 2, 2021
    #14
  15. Ridsharc

    Ridsharc UKBF Newcomer Free Member

    15 0
    Just saw your update - if they have your payment details, expect them to enthusiastically take payment much after delivery. Fedex are the worst in this regard. I've had invoices related to parcels 2 months after they were delivered. I started deleting payment details after each parcel was recd. I'd then dispute the later invoices and only once they were negotiated, re-enter my payment details for further shipments. I expect Fedex/UPS to really abuse their (new?) customs clearance powers amid all the confusion. DHL are a little less obvious in their abuse.
     
    Posted: Jan 11, 2021 By: Ridsharc Member since: Dec 12, 2017
    #15
  16. Snufflebean

    Snufflebean UKBF Newcomer Free Member

    10 0
    When you say negotiate, what do you mean? I don't have any payment details saved in the portal at the moment. Its all new to me as I don't import from outside the EU so never had to negotiate customs issues before.
     
    Posted: Jan 11, 2021 By: Snufflebean Member since: Jan 2, 2021
    #16
  17. Ridsharc

    Ridsharc UKBF Newcomer Free Member

    15 0
    You get an estimate of the total charges prior to booking the shipment. If the invoices related to that shipment rack up to twice or even three times the estimate (and not because you've incorrectly declared the size/weight/contents), I think there's a valid case to dispute and ask for a discount.
     
    Posted: Jan 11, 2021 By: Ridsharc Member since: Dec 12, 2017
    #17
  18. Snufflebean

    Snufflebean UKBF Newcomer Free Member

    10 0
    Ah ok, my wholesaler books the shipment in and sorts that all out from their end. I only have to pay the import VAT and associated charges from UPS. Will keep a look out for excessive ones, although as I can claim all the VAT back I'm not overly worried.

    Handy to know though!
     
    Posted: Jan 11, 2021 By: Snufflebean Member since: Jan 2, 2021
    #18
  19. 2JP

    2JP UKBF Contributor Free Member

    96 8
    Well, since we have said something bad about FedEx and UPS, let me add that DHL frequently do not recognise us as being a company and we hardly ever get a C79, because data is frequently incorrectly entered by them. Maybe it is because we don't have an account with them (how do you insist on an exporter including your EORI and how do you insist on the courier noticing it?). Sometimes currency has been misinterpreted so VAT value is completely wrong. None of them is very good but it is not surprising given the huge complexity of a SAD C88 and how much guesswork the average little imported package will require by the courier to perform the import declaration. It is just an obstructive and inefficient system. Hence why we see a little bit of rocking the boat and chaos reigns. (Politicians and bureaucrats must have no clue how it works in reality.)

    We could waste hours on hold on the phone to HMRC and UPS/DHL/FedEx but as we import very little we take the pragmatic approach of trying to ensure our VAT return correctly reflects reality and the rules. When I hear official stats regarding imports and exports I know exactly how much to trust them especially when it comes to B2C transactions and the typically low value declarations from Chinese exporters.
     
    Last edited: Jan 11, 2021
    Posted: Jan 11, 2021 By: 2JP Member since: Dec 10, 2017
    #19