UK Import Charges- Too High?

[TSOL2021]

Morning All,

I am hoping someone with a bit more knowledge can put my mind at rest.

For our business we import direct from our manufacturer in China to the UK on a bi-annual basis. Our first order for 2021 arrived into the UK in June- Shipping costs were much higher than last time but that is a given I think.

My issue is we have today been invoiced USD $3358 for 'UK Local Govt & Port Charges' which seems extremely excessive...

We paid the VAT at the point of entry so the above figure does not include that. For reference the shipment was sent in cartons to the below dimensions/weights:

Number of boxes -Dimensions (LxWxH) -Weight
54 - 40cm x 30cm x 24cm 16.500kg (891 KG Total)
175 - 48cm x 39cm x 29cm 18.000kg (3,150 KG Total)

The product is a boxed card game, and the port of entry was Felixstowe.

I have asked for an itemised breakdown of how they have reached these charges (I can see that Felixstowe port publish their charges, so they should be able to provide this surely)- but can anyone advise if they also think this is excessive or about right for a shipment of this size?

I just feel like the importers are taking us for a ride a little bit, and although I am 99.9% sure we will not get anywhere with this and have to bite the bullet and pay regardless of if the breakdown is provided I am just wondering if there is anything anyone can suggest we question, or do differently in the future.

Any advise is greatly appreciated.

N

 

[ADC]

Government doesn't charge anything apart from Duty & VAT. You say you have paid the VAT, but is there any duty on these products have you checked? Also does the $3358 include shipping charges from China?

 

[WaveJumper]

Good morning and welcome to the UKBF. Unfortunately this sounds about right shipping companies fees have gone through the roof if you do a little search on here you will see there are plenty of threads on the topic and a lot of people "getting caught out"

 

[TSOL2021]

Hi ADC and Wave-Jumper, Thank you both for taking the time to reply.

@ADC- This does not include shipping, we paid this in advance (LCL to door and was $2141 if interested). Regarding duty our product HS code is 950440. Which I believe there should be no duty on?

The importer we used is advising that the charges are port fees (THC) and delay fees as the ship could not dock for 48 hours?

If the charges seem in line then that is fine- I was just shocked as the port charges in the UK were higher than the actual freight cost!

 

[Mike Foulds]

Hi.

Any customs entry should have been completed using software, which will print a copy of the customs entry, showing the breakdown of values, and any duty/invoice amounts.

The Duty and VAT will be calculated based on the value of the goods, freight, insurance and an amount to cover UK costs, VAT is calculated using 20%, and the percentage charged for the duty on your item(s) is found using the commodity code for eacj item, which can be checked and found using the HMRC trade Tariff:

https://www.trade-tariff.service.gov.uk/sections

As to the duty rate, based on your product description,950590000 would be suitable, which is 2% duty.

I would suggest that, as a rough rule of thumb, depending on your product, if you add the freight to your invoice value, add on £300 to cover insurance, UK costs, etc, and then multiply by 8% (Most duty rates are between 0% and 12%, Max), that would be your MAX duty amount, and if you add that duty amount to the freight, invoice value and £300 amount, then multiply that by 20%, that would be an approx amount for VAT. HOWEVER, these costs would only be ESTIMATES, and, as mentioned, whoever has completed the import entry on your behalf should supply a copy of the customs entry, alongside the Duty/Vat invoice you should have been sent, as standard.

As to the duty rate, based on your product description,

Hope that helps, and apologies if too much detail.

 

[TSOL2021]

Hi Mike,

That really does help so thanks for taking the time to go into such detail.

The VAT we paid direct to HMRC at the time the shipment arrived (end of May).

We have only been sent the invoice for 'duty' today- I believe they are using the word duty to be all encompassing (and not just mean duty)

I think my first port of call with the importers is to ask for this to be itemised on a breakdown- would this be prudent.

For the avoidance of any miscommunication the $3358 does not include the VAT or Freight charges (this had already been paid separately. This is purely local charges (which I am assuming to be THC, DTI, Duty & Documentation fee). It just seems excessive but again we don't really have a lot to compare against so thought I would ask here!

 

[Mike Foulds]

No problem, happy to help.

Just a comment, you mention:
The importer we used is advising that the charges are port fees (THC) and delay fees as the ship could not dock for 48 hours?

Delay fees is absolute rubbish, you should not receive any charges for that.

You should also check the terms of your invoice from your supplier, if the terms are CPT, or DDU, then the SHIPPER should pay the local costs (Apart from Duty/Vat), all other costs should go back to origin.

If the terms are CFR, then you would be liable for the THC, Docs, Customs CLearance, Delivery and local costs in the UK, which are set by the co-loader.

It's worth also double checking what the Bill of Lading states, it may state that freight is paid through to your door, or to port, if that's the case, raise it with the co-loader and let your shipper know you are being charged extra.

 

[japancool]

Hmm, who arranged the shipping, you or your Chinese supplier? And on what terms?

 

[TSOL2021]

Hi Mike- thank you, I am checking the terms now and ask for copies of all invoices.

We arranged the shipping through our 3PL provider. As soon as I know the terms this was agreed on I will update you all.

Thank you for all your responses so far- it really is appreciated.

 

[TSOL2021]

The terms were CFR, so we are liable for the fees- it just seems that they are significant based on the product, and order size.

I have asked for the itemised breakdown of how they reached the figure for charges so once I have this I will post on here. I just wanted to get a feel if these charges were to be expected or if people thought they were excessive.

Thank you

N

 

[Financial-Modeller]

We obviously don't know the value of the shipment or units @TSOL2021 , but I guess your question is:

Is GBP600 per tonne of stock reasonable for:

...Docs, Customs CLearance, Delivery and local costs in the UK, which are set by the co-loader...

How does it compare to prior invoices on a per unit basis?

 

[TSOL2021]

Hi There,

Thanks for your response.

In regards to the value of the shipment I am happy to share this- please see below:

7000 Units at $1.95
3600 Units at $0.65
3600 Units at $0.65
3600 Units at $0.58

Total $20,418

The total weight of the shipment was 4,052 KGs and consisted of 229 cartons size 38X30X20CM

Prior shipments were agreed with our manufacturer direct and were an all inclusive cost- last time we paid £2700 for a shipment of the same size (excl VAT but including all other costs- shipping, port fees etc).

I just think we may be being swindled on Handling charges- but again it might just be the cost at the minute so I am unsure.

Apologies if I am trying to find an answer to an unanswerable question- I am still waiting on the full breakdown of how they reached these fees.

N

 

[Mike Godwin]

This doesn't sound right but without seeing the documentation it's difficult to give an exact assessment. On CFR terms all shipping costs up to arrival UK port terminal are paid for by the Seller who should also be arranging the shipping. On arrival the Buyer is responsible for duty (if applicable) & VAT plus terminal handling charges, customs clearance and DTI fee where applicable (some agents include this in their customs clearance fee) plus of course the delivery to their UK premises. The amount mentioned does seem excessive just for the latter. Also, why are these UK fees quoted in US$ and not UK£? If you would like to share a copy of the B/Lading & commercial invoice with me, I will gladly give you the correct figures you should be paying.

 

[TSOL2021]

Morning All,

We have now had a response regarding the breakdown of costs.

Just for Clarification (some costs are in £ or $ depending on whom charged us)

Shipment of Boxed Card Games:

7000 Units at $1.95
3600 Units at $0.65
3600 Units at $0.65
3600 Units at $0.58

Total weight of the shipment was 4,052 KGs and consisted of 229 cartons size 38X30X20CM

Total Commercial Cost: $20,418

Shenzhen-Swindon (Entry Port- Felixstowe)

Terms: DDU. Paid for Door to Door service.

Charged:

Shipping $2141

Upon Entry to the UK we were then charged:

Duty- £293.15
Deferment Fee- £15.00
VAT- £2990.14
Customs Clearance- £45.00

We have then also subsequently been charged (by our 3PL):

UK Local Charge - $3035.73
Admin fee and bank charges - $47.27
Gate Charges - $20.00
Entry summary declaration fee -$25.00
Pick up charge - $230.00

It is particularly the UK Local charge that they (3PL) have charged- what could this potentially cover?!

I have asked them for a further breakdown of exactly what these charges are, but surely this is wrong?!

I have all Bill of Lading/commercial invoice etc but cannot post or attach links to images due to being new.

Any further help is appreciated.

N

 

[The customs clerk]

Hi TSOL,
If this was DDU then you should have only paid initial charges not covered by these terms.

Duty- £293.15
Deferment Fee- £15.00
VAT- £2990.14
Customs Clearance- £45.00

All the other charges below should be for the shipper - probably why they have been issued in USD

UK Local Charge - $3035.73
Admin fee and bank charges - $47.27
Gate Charges - $20.00
Entry summary declaration fee -$25.00
Pick up charge - $230.00

What does seem strange is if you have arranged the shipping through your 3PL are you sure terms are DDU? Usually under DDU terms the shipper will arrange with their own provider - certainly if they are regular shippers.

Quick question you state above you were charged shipping $2141 - who charged you this the logistics company or your supplier?

 

[GraemeL]

Hmm, who arranged the shipping, you or your Chinese supplier?

Very relevant

We have then also subsequently been charged (by our 3PL):

UK Local Charge - $3035.73

What is a local charge?

A not so wild guess would say that you got a cheap price for 'freight plus' from your chinese supplier and now the local agent is making up the difference and charging you. Did you decide who the local agent was going to be?

 

[TSOL2021]

The Shipping was actually provided by our 3PL (not our manufacturer- we have used them before with no issues).

The invoice we have from Eclipse Worldwide Services- where we paid VAT, Duty etc show clearly the terms of shipping as DDU.

I feel you are correct GraemeL, and that we are being swindled- on their invoice they list it as UK Local Charge- so we have gone back and asked what this is made up of.

 

[Mike Godwin]

Best advice I can give is try to find a UK freight forwarder who can take care of all shipments for you regardless of the terms of sale/delivery. They will be well aware of what charges you are responsible for and what your Seller is responsible for and will be looking out for you. It occurs to me that you may have overpaid on previous shipments due to the lack of understanding of the shipping terms.

You can also nominate your forwarder to receive and clear UK customs for you at agreed rates beforehand. This will put you in full control of your 'leg' of the transport meaning you'll be in control of your cost element as well.