Shipping agent calculated VAT & Duty wrong - what to do?!

[HankMcSpank]

My shipping agent seems to have severely miscalculated the amount of import duty & VAT attributed to a shipment that has just arrived.

So what to do?

Now I know the correct (moral) answer...tell them of their error! But frankly, it would really ease some cashflow issues I have if I let it ride as per their (mis)calculation ...but it then flushes out the question "Who'd get in trouble by proceeding with the miscalculation?"

I'm hoping I could shrug my should & say "Hey, I'm a busy guy...I just paid what was asked of me" (incidentally, I gave them the correct supplier invoice...showing the correct full amount that I'd paid for the goods, so there's no hint of naughtiness wrt under-declaring the value of the shipment here...this is simply finger trouble on the old calculator at the shipping agent's end!)

I'm VAT registered so the VAT I can claim back anyway, but I'd still have to shell out the VAT now (like I say cashflow is an issue for me at the moment)

So what are the ramifications?

 

[Wavecrest Ltd]

How much of a difference are you talking? Is it just a few quid or are you talking hundreds/thousands? May be the shipping agent has inadvertantly used the wrong currency for the invoice value perhaps (does happen sometimes).

 

[HankMcSpank]

I reckon it should be about £4,000.....but they've got the VAT owing as £400. Like I say, I'm VAT registered, so the VAT would come back to me anyway....but it would certainly help 'oil things' if I didn't have to shell out £4k now!

I'm figuring this error will be flushed out later at their end? (because surely they have to key in the amount on the invoice.....or perhaps they've already done that?)

 

[Wavecrest Ltd]

Normally they would have to key the invoice figures into their entry system to get the figures for VAT, duty etc. Is it only VAT on this shipment or is there also duty involved?

 

[HankMcSpank]

There's duty involved too (which obviously is much less than it should be)

As I say I realise the right thing to do would be to flag it, but it's not my mistake...it's theirs! (& I've given them all the correct info....supplier invoice, which had full & correct values on it).

 

[Wavecrest Ltd]

I would say if the mistake looks obvious and it comes to light with HMRC at a later date they may take a dim view even if the error is on the part of your clearance agent... may be better to point the error out to your agent now and get them to correct it

 

[HankMcSpank]

Fair enough....that's what I thought too - I've just fessed up to the agent & asked them to re-calculate.

thanks for your input

 

[Wavecrest Ltd]

Good man

Honesty is the best policy after all....

If there's ever anything I can help you with on the shipping front please let me know

 

[arnydnxluk]

I think you made the right choice. This may be something you regret later if you had decided to turn a blind eye.

 

[Karimbo]

if it was just vat it wouldn't be as bad, but still bad. Businesses on FRS would stand to gain from the abnormally low input VAT.

Duty is not reclaimable and the revenue will lose out if you under declare.

Its your responsibility as much as theirs to ensure the vat is reported correctly. I would say more so your responsibility because admin error on their part is excusable but for you it isnt. you need to have checks and balances in place.

Be firm with the shipping agent and ask them to correctly value you the imports and make sure they do not pass the admin charges to correct this error onto you.

 

[HankMcSpank]

To be clear...I did tell the shipping agent. My invoice was went recalculated ....& went from about £600 upto £5,000! (most of which was VAT, which I can reclaim - incidentally, I'm not on the FRS VAT scheme)....& it has all been paid now.

Thanks for all your input