UPS say they want £7200 in VAT on a £4000 shipment

[welcomebrand]

I'm trying to get some sense out of UPS on a shipment from a regular supplier (Japanese knives) as they're asking me to pay £7200 import VAT/duty on a shipment where the value is only £4000. For context, the last shipment from the same supplier last month was £8500 and the import charges were £1690

Trying to speak to their call centre which seems to operate on the worst phone lines in the world and staffed by people with very limited English is hopeless and emailing them back, they just insist the charges are correct and need paying.

Anyone know why they might think the charges should be this high and if there are any means I can chase it up that might actually be helpful?

 

[WaveJumper]

The less said about UPS the better, hopefully you get it sorted. One thought though are you sure they correctly charged you for shipping on the last consignment as the £1690 may just cover the VAT?

 

[welcomebrand]

The less said about UPS the better, hopefully you get it sorted. One thought though are you sure they correctly charged you for shipping on the last consignment as the £1690 may just cover the VAT?

They're pretty dire when anything goes wrong but to be fair, it's about the same as all of them in that respect.

The last shipment was pretty much all VAT and a few small disbursment charges but the last charge is just as an example and is consistent with roughly how much they charge on our regular shipments.

This current one has a breakdown for a shipment value of £4000 of:

Duty £438.00
VAT £6,598.85
Disbursement £175.92
Storage fees £0.00
Freight £0.00
Total £7,212.77

 

[LPB 123]

Ask them for a copy of the commercial invoice, so you can see what they're basing it on. It could just be an error in the value on the commercial invoice.

Try e-mailing [email protected] as I think they deal with amending declarations etc.

 

[welcomebrand]

Ask them for a copy of the commercial invoice, so you can see what they're basing it on. It could just be an error in the value on the commercial invoice.

Try e-mailing [email protected] as I think they deal with amending declarations etc.

Thanks - this seems to be the only sane explaination, I'll drop them a line and see if I get any joy there

 

[WaveJumper]

I tend to agree with above it looks like someone has completely miss read the invoice with that amount of VAT it would be (off the top of my head) circa something like £32k

 

[japancool]

The duty amount seems quite high as well. What tariff code are they using?

 

[Novevan]

I'm trying to get some sense out of UPS on a shipment from a regular supplier (Japanese knives) as they're asking me to pay £7200 import VAT/duty on a shipment where the value is only £4000. For context, the last shipment from the same supplier last month was £8500 and the import charges were £1690

Trying to speak to their call centre which seems to operate on the worst phone lines in the world and staffed by people with very limited English is hopeless and emailing them back, they just insist the charges are correct and need paying.

Anyone know why they might think the charges should be this high and if there are any means I can chase it up that might actually be helpful?

Has this problem been solved? The duty is too high!!

 

[MOIC]

UPS specifically, have had many instances of 'false' Duties payable.

Challenge it, providing the following documents:

1. Commercial Invoice showing the value & HS Code.

2. Shipping cost.

You can calculated it yourself with the above information. There'll be a minor adjustment for currency exchange rates.

 

[Chan]

I'm trying to get some sense out of UPS on a shipment from a regular supplier (Japanese knives) as they're asking me to pay £7200 import VAT/duty on a shipment where the value is only £4000. For context, the last shipment from the same supplier last month was £8500 and the import charges were £1690

Trying to speak to their call centre which seems to operate on the worst phone lines in the world and staffed by people with very limited English is hopeless and emailing them back, they just insist the charges are correct and need paying.

Anyone know why they might think the charges should be this high and if there are any means I can chase it up that might actually be helpful?

I think you should let the logistics company ship your products to your delivery address in the UK instead of the port, so that you don't have to deal with any tax issues, just receive the goods.

This way called "DDP" , they can DDP to your private address.

If you are interested in learning about knives from China, I can help and take care of shipping your product to your UK delivery address, ensuring you receive it safely and at a much lower cost than the way you do it now .@welcomebrand

 

[WaveJumper]

Would be interesting to know how our OP has been getting on

 

[Customs Geek]

I think you should let the logistics company ship your products to your delivery address in the UK instead of the port, so that you don't have to deal with any tax issues, just receive the goods.

This way called "DDP" , they can DDP to your private address.

If you are interested in learning about knives from China, I can help and take care of shipping your product to your UK delivery address, ensuring you receive it safely and at a much lower cost than the way you do it now .@welcomebrand

DDP not always the easy or cheaper option it may seem at first .
We all see DDP going wrong for many UK companies who find themselves unexpectedly responsible for import duties and import VAT when their name unknowingly is used to make the import into the UK.

These problems come from:

• often the supplier does not have a business in the UK and does not understand UK import law and tax rules.
• a non UK business cannot be the importer in their own name so the UK business is named as importer.
• if the supplier is not registered for VAT in the UK they usually name the UK VAT registered business as the importer so they cover the VAT part of the import.
• once named as importer the buyer is legally liable for taxes and duties up to three years after import.The buyer is therefore responsible for any inaccuracies in the customs declaration such as the hs code and goods value.
• HMRC have no way of contacting the seller or recovering debt from them so will charge the UK company For underpaid taxes.
• the supplier hasn’t arranged for onward transport to the final address so there are extra charges.
• the supplier hasn’t paid the customs agent so the goods are held until paid.
• The buyer is unsighted to costs of shipping or the taxes in that DDP price.

 

[paulears]

My UPS driver says this happens all the time - much of the entry is done overseas and the figures mean little to the operators, so it never looks like a mistake. He finished with "and best of luck with the call centre...."

 

[Chan]

DDP not always the easy or cheaper option it may seem at first .
We all see DDP going wrong for many UK companies who find themselves unexpectedly responsible for import duties and import VAT when their name unknowingly is used to make the import into the UK.

These problems come from:

• often the supplier does not have a business in the UK and does not understand UK import law and tax rules.
• a non UK business cannot be the importer in their own name so the UK business is named as importer.
• if the supplier is not registered for VAT in the UK they usually name the UK VAT registered business as the importer so they cover the VAT part of the import.
• once named as importer the buyer is legally liable for taxes and duties up to three years after import.The buyer is therefore responsible for any inaccuracies in the customs declaration such as the hs code and goods value.
• HMRC have no way of contacting the seller or recovering debt from them so will charge the UK company For underpaid taxes.
• the supplier hasn’t arranged for onward transport to the final address so there are extra charges.
• the supplier hasn’t paid the customs agent so the goods are held until paid.
• The buyer is unsighted to costs of shipping or the taxes in that DDP price.

For large quantity like whole container , DDU is better to them, because their tax can be can deducte value-added tax when selling them.

But for small quantity, Similar to the situation of the questioner, he imports knives only worth $4,000 form Japan.

I believe that such goods are relatively small, probably less than 30 boxes.

The clearance fees for small, scattered shipments like these are not always calculated strictly according to the regular tax rates; many times, there are additional charges (customs might charge extra fees under various pretexts). For customers in such situations, DDP (Delivered Duty Paid) is more suitable.

 

[welcomebrand]

Sorry folks - to update, finally got someone in [email protected] department to recalculate it and looks like it was a simple error. The final duty bill was just over £900. Still way higher than FedEx charge for similar shipments but at least in-line with what UPS have charged us before.

Still kept getting emails from various customer service muppets for a week after it was delivered saying they were looking into it but this one looks like a simple error in their side but that nobody on their terrible customer service line even understood the problem.

Now just need to find out why UPS import duty charges are always more than double FedEx and DHL's for the same type of products.

 

[japancool]

Now just need to find out why UPS import duty charges are always more than double FedEx and DHL's for the same type of products.

Does your supplier include the HS code on the commercial invoice accompanying the shipment? Or is that being left to UPS's judgement?

 

[welcomebrand]

Does your supplier include the HS code on the commercial invoice accompanying the shipment? Or is that being left to UPS's judgement?

Yep, all our suppliers include the HS code (821192) for knives

 

[japancool]

Yep, all our suppliers include the HS code (821192) for knives

You should only have duty of 1.4% in that case, if the COO is Japan.

So in your case, duty and VAT should work out to £800 VAT + £56 duty, subject to the exchange rate, if the value is declared in yen. So £900 sounds about right.

 

[welcomebrand]

You should only have duty of 1.4% in that case, if the COO is Japan.

So in your case, duty and VAT should work out to £800 VAT + £56 duty, subject to the exchange rate, if the value is declared in yen. So £900 sounds about right.

Yeah, it seems about right. I don't know how FedEx charges are so low with the same COO/HS code etc though. Last shipment from a different supplier was £6.5k value and FedEx only charged us £410.

 

[japancool]

Yeah, it seems about right. I don't know how FedEx charges are so low with the same COO/HS code etc though. Last shipment from a different supplier was £6.5k value and FedEx only charged us £410.

Did they declare the value correctly?

 

[Customs Geek]

The clearance fees for small, scattered shipments like these are not always calculated strictly according to the regular tax rates; many times, there are additional charges (customs might charge extra fees under various pretexts). For customers in such situations, DDP (Delivered Duty Paid) is more suitable.

Whilst this bit of the thread has nothing to do with the OP initial question I feel I must comment. We may have many comments and complaints about customs in the UK but suggesting UK customs may ’charge extra fees under various pretexts’ is wildly inaccurate. It may be the case in some parts of the world but not here. To be clear I do not work for HMRC but have decades of experience dealing with them.
If you are an importer in the UK the customs charges are transparent and every importer can request to see the details on the customs declaration. Equally the basis for charges and duty rates are all publicly available free of charge. It’s also worth noting that calculation of charges are highly automated based on the data input by customs clearance agents. Customs officials are not at liberty to randomly ‘charge extra fees’.
Incorrect charges do happen, as seen here, but can be corrected either through the customs agent or directly with HMRC.

 

[The Soup Dragon]

We stopped using UPS a couple of years ago after using them for mnay years, as they just turned to cr@p. We recently used them again for a couple of shipments and ............. we have stopped again as they are just not up to the job.

 

[Ray272]

Just began dealing with a new supplier who on our first order, this week, created a shipment with DHL to send to us, did not check it just thought I will pay the taxes once I see it on the way.

Someone in their warehouse ignored our EORI/VAT & Phone Number and as a result DHL needed to perform a pre collection check on the receiver/address.

DHL sent the waybill and commercial invoice to our warehouse, was emailed to me, noticed the CI value is $9000 and yet the order value was just under $4500.

Shipment has been cancelled pending the new data for the CI and addressee.