Help Needed: Recovering Advanced Duties & Freight from a UK Customer！

[CheeTng]

Hello everyone,

I’m reaching out to seek advice and share my experience with a long-term client in the UK who has now significantly delayed payment.

The client purchases sports camera accessories and sells on both Amazon and eBay. We have been working together for about 2 years, with roughly 3–4 orders per year, and payments were always on time.

In August, we shipped his latest order from China to the UK via Rail + DPD, cleared customs using his EORI number, and we even advanced the duties and VAT on his behalf. The total cost owed (freight + duties/VAT) is USD 3,076.48.

Since then, I have been continuously following up on payment. The client claims that poor sales have prevented him from paying. I even offered installment payments, e.g., $500 or $1,000 per time, but he insists he cannot afford even that.

Honestly, I cannot believe that even a $500 payment is impossible. This situation has put me in a very difficult position at my company. From August until now (4 months), I have not received my salary, and if I cannot recover this amount, I risk losing my job.

I want to note that I have not chosen to expose the client’s information, as I feel this could negatively affect his reputation. Of course, I reserve the right to disclose it if necessary, because I still believe the client is likely not intentionally defaulting and may genuinely be facing financial difficulties.

I’m sharing this here to:

1. Warn others who might work with this client.
2. Seek advice on practical ways to recover payment for freight and duties when a long-term client suddenly defaults.

Has anyone faced a similar situation? What steps did you take to collect outstanding logistics payments, especially for international shipments where you’ve advanced duties and VAT?


Thank you in advance for any guidance or insights.

 

[Ozzy]

Some of this will depend on the jurisdiction your contracts with your customer are governed under, so some of these comments may not be valid, but...

Assuming they are a Limited Company, check their records on Companies House. Are they late filing their accounts for example, are they showing signs of being in financial difficulty?

There are companies in the UK that specialise in debt recovery, it may be worthwhile contacting such a company for them to collect the debt on your behalf. This is often more effective if you have first tried through the courts, such as the Small Claims Court.

A debt recovery company can refer to that in chasing the debt, and they usually add their charges on top of the money owed to you so might not cost you anything.

Ultimately, I'd suggest appointing someone in the UK to chase your debt for you as they are on the ground here and will understand the legal resources available here. I'm sure some members here will have people they can recommend, or a member here may show up who does this sort of thing.

 

[Chris Ashdown]

What does your contract state about payment and where legal action can be taken. The big question is why did you give credit terms
Not sure if you can claim under Small Claims court in UK

 

[WaveJumper]

As above check them out on CH. Have you checked to see if they are still trading on Amazon

 

[Paul Kelly ICHYB]

What terms was the order placed with? DDP, CIF, etc?

 

[CheeTng]

Some of this will depend on the jurisdiction your contracts with your customer are governed under, so some of these comments may not be valid, but...

Assuming they are a Limited Company, check their records on Companies House. Are they late filing their accounts for example, are they showing signs of being in financial difficulty?

There are companies in the UK that specialise in debt recovery, it may be worthwhile contacting such a company for them to collect the debt on your behalf. This is often more effective if you have first tried through the courts, such as the Small Claims Court.

A debt recovery company can refer to that in chasing the debt, and they usually add their charges on top of the money owed to you so might not cost you anything.

Ultimately, I'd suggest appointing someone in the UK to chase your debt for you as they are on the ground here and will understand the legal resources available here. I'm sure some members here will have people they can recommend, or a member here may show up who does this sort of thing.

Thank you for your detailed explanation and your patience.

Yes, they are a registered company, and I do have their company name, VAT number, EORI number, as well as the consignee’s address and phone number.

However, since this is a cross-border trade dispute, I’m not entirely sure whether a debt recovery agency or the court system would be truly effective.

Another important issue is that, in logistics transactions like this, communication is usually done through WhatsApp or email, and there is often no formal contract signed. Because of this, I think taking the case to court could become quite challenging.

 

[CheeTng]

What does your contract state about payment and where legal action can be taken. The big question is why did you give credit terms
Not sure if you can claim under Small Claims court in UK

To be honest, cash on delivery is quite common in the logistics business.

However, given the current complex geopolitical situation and the post-pandemic economic slowdown, I believe we should avoid offering credit terms whenever possible to protect our legitimate interests.

As for legal action, I think it would be quite difficult. My hope is that by exposing the situation, it may create some pressure for them to proactively repay.

Of course, if they are truly on the verge of bankruptcy and lack the funds to pay, then even losing business credibility would not enable them to settle the debt.

 

[CheeTng]

As above check them out on CH. Have you checked to see if they are still trading on Amazon

Yes, their eBay and Amazon stores are still operating normally.

However, we are unable to track their sales for the past three months, as only total sales figures are visible.

Another issue is that for action camera accessories—such as mounts, protective cases, or straps—these are relatively low-value products.

If they intend to repay the debt, their sales would need to reach several hundred or even thousands of units.

 

[CheeTng]

What terms was the order placed with? DDP, CIF, etc?

NOT DDP, because DDP terms are unofficial and not fully compliant.

We use PIVA or self-paid tax arrangements, where our customs broker advances the taxes on our behalf. At the time, clearance was done using the customer’s EORI number and authorization.

In this particular case, this means that we not only lost the shipping fees but also the import duties and VAT that we had advanced on their behalf.

 

[Paul Kelly ICHYB]

Well, it goes without saying that you won't be doing that PIVA again!

 

[Customs Geek]

NOT DDP, because DDP terms are unofficial and not fully compliant.

DDP Incoterms are official ICC terms not unofficial. I wouldn’t recommend using them but they are certainly can’t be described as not fully compliant.

We use PIVA or self-paid tax arrangements, where our customs broker advances the taxes on our behalf. At the time, clearance was done using the customer’s EORI number and authorization.

This is a contradictory statement. If PIVA is used then the person whose EORI and VAT number is declared on the entry is obliged to self account ( and reclaim) through their VAT return. Only someone who is UK VAT registered can use PIVA. There is no VAT to pay by anyone at the time of import.
If VAT is paid at import either directly or via the customs agent the person whose EORI and VAT number named on the import will get a certificate of VAT payment that they can use to reclaim import VAT irrespective of who actually paid it.
If your customer isn’t VAT registered then they can’t use PIVA or reclaim any import VAT.

In this particular case, this means that we not only lost the shipping fees but also the import duties and VAT that we had advanced on their behalf.

There’s a lesson learned here not to agree to advance VAT payment anyone who is VAT registered. As an overseas seller it’s always high risk dealing with the taxes of another country without fully understanding the risk.