Import Duty + VAT, Invoiced already?

Discussion in 'International Business' started by FirstTimeImporter, Jul 9, 2020.

  1. FirstTimeImporter

    FirstTimeImporter UKBF Newcomer Free Member

    5 0
    So it's my first time importing a container load from overseas. The goods have not yet arrived in the UK. They'll arrive at the port Sunday evening. I just received an invoice from my freight forwarder asking for payment for the Duty + VAT. The amounts requested were expected and not the issue. The question I have is why has the freight forwarder sent me an invoice before the goods have even landed in the UK?
    It's Thursday today, goods will arrive at the port on Sunday.
    Does this mean they've already pre-cleared the goods and the amounts to be paid are known?

    Any insight here would be helpful.
     
    Posted: Jul 9, 2020 By: FirstTimeImporter Member since: Jul 9, 2020
    #1
  2. MY OFFICE IN CHINA

    MY OFFICE IN CHINA UKBF Legend Full Member

    5,610 1,319
    Your Freight Forwarder has all the documents to calculate the Import Duty & VAT, as well as their charges.

    Pay it when requested to avoid any delays in the container getting cleared and delivered to your warehouse.

    Good luck with your first container!
     
    Posted: Jul 9, 2020 By: MY OFFICE IN CHINA Member since: Nov 16, 2011
    #2
  3. FirstTimeImporter

    FirstTimeImporter UKBF Newcomer Free Member

    5 0
    Ah so they've calculated based off the documents. The demand from customs hasn't yet been made you think? You are saying that the freight forwarder is just making sure they have the money in advance ready to make the payment when due? Am I correct?

    I was wondering if there was some sort of pre-clearance where they've already lodged the entries and got the clearance etc
     
    Posted: Jul 9, 2020 By: FirstTimeImporter Member since: Jul 9, 2020
    #3
  4. MY OFFICE IN CHINA

    MY OFFICE IN CHINA UKBF Legend Full Member

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    My advice is to pay it when you've been asked to pay it, if you want your container quickly without any additional charges.

    They know the cost down to the last penny.

    They're being efficient.
     
    Posted: Jul 9, 2020 By: MY OFFICE IN CHINA Member since: Nov 16, 2011
    #4
  5. Ray272

    Ray272 UKBF Regular Free Member

    313 43
    Sorry to add doubt to this but this really happened and is a possible occurrence, especially for large shipments.

    containers are obvious targets for customs inspections as the idea is that if it is a container it is likely a fair amount of goods so warrants an inspection. If you have all the correct paperwork in order, your labelling if any is all correct then you have nothing to worry about but if you have a slightly off track product, for example a dual use product which is classified under 2 different classifications, then you could have questions raised which would need answering. Lets say you take a week to sort that out with Customs as these things take time, the cost for warehousing in a bonded warehouse is likely to be thousands of pounds just for a week.

    I had 4 pallets go through this process and they charged me £1200 ( 8days) and had the cheek to confirm I had all the correct paperwork in order they just needed proof and time to evaluate my information.

    The shipping company were smart to collect the duties and taxes prior to goods passing through customs. Subsequent shipments were met with a lot of phones calls and emails confirming we would pay once goods have passed customs. They did accept these terms. I believe it is called a deferment account but I may be wrong on that.
     
    Posted: Jul 9, 2020 By: Ray272 Member since: Jul 5, 2017
    #5
  6. MY OFFICE IN CHINA

    MY OFFICE IN CHINA UKBF Legend Full Member

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    A deferment account is an account that the UK freight forwarders have with HMRC. HMRC trusts them to pay all the Duties. They will ask you for the Duties and all expenses, prior to any deliveries taking place.

    There are always (a very few) exceptions.
     
    Posted: Jul 9, 2020 By: MY OFFICE IN CHINA Member since: Nov 16, 2011
    #6
  7. GraemeL

    GraemeL Pain in the neck? Full Member - Verified Business

    5,129 1,108
    Correct advice. Pay it. If there is any delay in your payment, you are risking additional charges for container storage.
    There might be extra charges anyway if customs choose to x ray your container, which is not unusual for a first time importer.

    Your container will not leave the port until all payments are made.
     
    Posted: Jul 10, 2020 By: GraemeL Member since: Sep 7, 2011
    #7
  8. CHUKTC

    CHUKTC UKBF Regular Free Member

    172 29
    We routinely file customs declarations prior to arrival and by paying in advance it will as others have said speed up the process. Particularly if the container is arriving at a weekend (as yours is). It has nothing to do with customs inspections. If they do inspect and decide you haven't filed correctly you will soon know! (and get an invoice for the balance owed).
     
    Posted: Jul 10, 2020 By: CHUKTC Member since: Jan 2, 2019
    #8
  9. Import Expert

    Import Expert UKBF Regular Free Member

    335 134
    As above, this is completely normal. The forwarder will 'pre-lodge' the customs entry (which gives them the figures), and invoice you then to make sure no delays (you only get 4-7 days 'rent free' at the port, depending on the shipping line). Once the vessel arrives, the entry goes 'live' and HMRC take the payment from the freight forwarders deferment account.
     
    Posted: Aug 24, 2020 By: Import Expert Member since: Feb 1, 2012
    #9