Karl Craig-West Website Builder, Public Speaker and Writer

28Nov/08114

I beat Federal Express – the implications are potentially big

A few weeks ago I bought a Christmas gift over the internet. The company I bought it from is based in Israel. I paid for the goods including shipping charges without a problem.

About 10 days later I received the gift via Federal Express (Fedex). So far so good.

Roughly a week later I received an invoice from Fedex for VAT (you have to pay VAT on goods bought from outside the EU if they're above a certain value). But the invoice also included a 'Clearance Administration Charge'.

The charge wasn't a lot of money but having checked the website of the company I bought the gift from I phoned the FSB legal helpline to check the validity of this admin charge. I found out that, since I'd not agreed to the charge at any point, then I shouldn't have to pay it.

Based on this I sent an email to the invoice enquiries address at Fedex saying that I hadn't agreed to the admin charges and, therefore, wouldn't be paying them (a copy of my email is below).

Well I've just had a response from them and they've cancelled the charges and cleared my account.

The thing is: I never agreed to the charges up front. In UK contract law, if there is no prior contract/agreement for the charges then I'm not obliged to pay them - and neither are you if you have the same situation.

This makes the admin charge potentially unlawful.

So, if you buy something from outside the EU and the vendor has nothing about admin charges by the shipping company in their T&C's then you should not have to pay the admin charge.

Sadly I think far too many people would just pay the charges without thinking about whether they should.

My email to fedex if you want to contest the charges.

Dear Fedex,

After having bought a present for my wife from Israel I was surprised to receive an invoice from you for VAT and clearance administration charges.

After having consulted my lawyer about the issue I agreed to pay the VAT, since Israel is not in the EU.

However, I refuse to pay the clearance admin charge since at no point was I made aware of, nor did I agree to, any terms and conditions which clearly stated that I would be liable for any such charges.

At no point in the transaction and subsequent delivery was any contract for a clearance administration charge made between Fedex and myself.
I understand that the supplier (Walletex) state on their website that they are not responsible for custom brokerage fees but I was not made party to the agreement between the supplying company in Israel and Fedex and, thus, entered into no contracts for any explicit charges with Fedex. I paid Walletex for delivery in good faith and no agreement between Fedex and myself exists.

If you want to pursue further charges for delivery or administration or the terms upon which goods are shipped, I suggest that you take it up with the organisation that hired you.

Therefore, I have paid the sum of £9.21 on the invoice (by phone) and hereby request that you cancel the remaining sum of £6.80 on the invoice for the clearance administration charge.

Please let me know when this has been done.

Regards,

email
Comments (114) Trackbacks (0)
  1. Please be aware that you should not treat this as legal advice. I’m merely sharing what I did and what happened as a result.
    This information was correct at the time of writing but may not be so now. So, if you act on this information then you do so at your own risk and I accept no liability..

  2. I brought a gift for my wife from hong Kong I think and Fed Express had contacted me a week later to tell me about VAT charges. I could not believe It. Item cost was £450 and VAT cost was £90. My item did say gift on it so I think it is unfair that I should have to pay VAT, but non the less, thank you for this email. I can atleast challenge the Admin charge of £10. What I dont understnad is why they want to cheese people off by adding a final VAT charge to the cost of their package. The think is we dont even know if the government will finally get the money and are they agents of customes and excersize?

    • Andrew, I know exactly how you feel about VAT but even gifts attract VAT. I’ve bought gifts from all over the world and had to pay VAT many times, it stinks. Buying within the EU is one solution because it’s only goods bought from outside the EEA (European Economic Area) that you’d have to pay VAT on.

      But to answer your question: yes the government gets the money. FedEx and all the other carriers have a legal obligation to declare the VAT they’ve charged and hand the money over to HMRC.

      • Thanks Karl. Another question. I received a note through the door from Royal Mail. They have a parcel for me from Royal Mail. The parcel comes from the USA. They have charged VAT and £8 handling fee. Do you have any idea how I would go about getting the handling fee as the Royal Mail would usually hand the item over after I have paid.

        Thanks.

  3. Hi Andrew,

    this one is a lot more tricky because Royal Mail can and will hold your parcel to ransom until you cough up. This is a constant issue with people who buy from outside the EU through eBay, they think they’re getting a bargain until the Post Office asks for £8 on each parcel.

    Fedex, and the like, tend to deliver and then ask for payment, which gives you a bit of wriggle room on the fees.

    The big thing to overcome is the fact that what they’re doing is actually legal, or legal until someone takes them to court to challenge the admin charges. And I can’t see that happening over £8.

    I think that this thread on MSE sums it all up: http://forums.moneysavingexpert.com/showthread.php?t=592233

    So, sadly and reluctantly, I have to admit defeat on this one. Sorry.

    Karl

    • Thanks Karl

      I took a look at the thread and it is clear that I have to pay the Royal Mail charges just as I thought. I would like to say that I disputed the FED EXPRESS admin charges and did not have to pay their £10 fee (I followed the instructions above.). I accepted the VAT charges so they still got £90 out of me.
      Thanks again.

      Andrew

      • Hi Andrew,

        Glad my efforts could be of help.

        the VAT payment is a common misconception. Many people think they shouldn’t pay VAT because they didn’t buy it from the UK.

        But I often have to remind people who email me: YOU HAVE TO PAY THE VAT, it’s the law.

        Karl

  4. Thanks for your advice, I’m just in the process of disputing the same £10 charge, but additionally in my case they inflated the total VAT Value by adding an extra £62 freight amount on top of the existing value, even though freight was already charged in the original order. That meant from my original £119 order I had a bill from Fedex for £47, nearly 40% of the order!

    David

    • Hi David,
      in this case it’s vital that you check the T&C of the vendor. Make sure that they’re not stated that you will be liable for freight charges etc.
      The last thing you need is for FedEx to come back to you and say that you were notified and thus agreed to the charge.
      Karl

  5. thank you so much for this i didnt even know about the charges the man at the door never said anything about charges and im damn well gona try and fight it – cant believe its not even a legal obligation for companies not to advice you before purchasing. so angry right now but i am defo gona fight it. thanks for great info :)

  6. Thanks for the post – I’m expecting a parcel by Fedex early next week, and there will be VAT incurred. The vendors T&Cs state “…buyers are responsible for all federal, state or local taxes, tariffs, import duty fees, and any other costs or expenses that may be associated with receipt of the item.” To me, that seems very vague as to whether it includes Fedex fees or not – do you have any advice? Cheers, Emma.

    • Hi Emma,

      I’d be inclined to challenge the admin fee because the vendor T&C’s are definitely vague. After all, the only thing that FedEx can do is to say no.

      However, as mentioned in the article above, you won’t have explicitly agreed to any charges by FedEx so you’re not, strictly speaking, contracted to pay them.

      Good luck and let me know how you get on.
      Karl

  7. Thanks so much for this great piece of advice. I disputed the FedEx charges and paid only the VAT on my invoice. I have now received an email from FedEx which says: “To confirm I have credited the administration fee from the invoice as requested. A credit note will follow in the post confirming this.”

    This is a fantastic result for us consumers. Many thanks again.

    Woo

    • Hi Woo,
      glad to have been of some help. Would you mind doing me a big favour and tweeting this post out?
      Cheers,
      Karl

      • Hi Karl,
        Could I get your advise on my case? I’ve bought some earrings from a US company and now I got charged by FedEx just like everyone else.
        I’ve been aware that the parcel would be delivered by FedEx but obviously I didn’t know about admin charges, all it said on the website was:
        Order of US $100 and up are shipped Free Federal Express International Priority service. This service is fully trackable.

        In the Terms and Condition section, the only thing I found out was to do with the tax which is as follows:
        Prices on the website do not include sales tax or any other customs duties, use, value added, excise, federal, state, local or other taxes. New York residents will be charged sales tax, but all other such duties or taxes shall be paid by you, or, in lieu thereof, customer shall provide us with an appropriate tax exemption certificate.

        So to my knowledge I have not entered into any contract with the FedEx, do you think I could successfully challenge their Clearance Administration Charge?

        Thanks,
        Dmitrijs.

        • Dmitrijs,

          If it is as you’ve said then you seem to have no contract between you and FedEx so what I would do is challenge the charges anyway. The worst they can do is say no.

          But I must reiterate that this isn’t advice, just a suggestion of what I’d do in your circumstances.

          Let me know how you get on.

          Regards,
          Karl

  8. Hello Karl and hello to all other readers.

    I’ve recently bought some shirts from the US and I’m not even going to bother to read the Terms and Conditions on the sender’s website because I’ve also received an invoice (2 weeks after the things arrived) and FedEx charged me a VAT of 9.11 GBP and an Advancement Fee (it’s the Clearance Administration Charge) and that was 10.5 GBP. So now, after reading all the posts, I’m most certainly going to write them an e-mail and refuse to pay for the second fee. However, I wanted to know is it possible to pay for the VAT over the phone and just tell them my Visa Debit Card number and not waste time to send cheques (it’s much too complicated seeing as how I’ve just opened my first bank account)…

    Thanks in advance and I look forward to hearing from you soon!

    Regards,

    Valeri.

    • Hi Valeri,

      You should be able to pay just the VAT over the phone since (I suspect) they’d be on very shaky legal grounds if they refused to take payment for taxes.

      However, I can’t say for sure how they’d react if you plain refused on the phone to pay the Advancement Fee. But it’s worth a try.

      The thing to bear in mind is that if you don’t fight it you’ll never get anywhere. And since they’ve already delivered the goods they can’t hold them to ransom until you’ve paid.

      Hope that helps and I look forward to hearing about how you got on.

      cheers
      Karl

      • Hi again.

        Well it has been exactly one month since I’ve received the invoice. Of course it takes some time for it to be delivered but the invoice date was Oct 11 and after sending fedex an e-mail about the vat and admin charge they still haven’t done anything about it. I’ve also sent them a letter (wasn’t recorded) , explaining my e-mail and all the other stuff I’m concerned about and told them to contact me asap, but to this day there hasn’t been any sort of information from them. So I’ve been reading that a lot of people have been receiving an ‘overdue invoice’ – after what time should I expect that letter, if they were to bother to send it that is….

        cheers :)

        • Hi Valeri,

          It’s great to hear that you’re fighting this charge but it’s no surprise that FedEx have taken their time to respond to your letter. The key with big organisations is that very little happens quickly. I would say that if you don’t receive an overdue invoice letter then don’t worry about it, they may have dropped the clearance admin charge without telling you. If you do get the letter then it’s likely that there will be a specific reply address or email address and you can continue to fight your corner from there.

          Good luck,
          Karl

  9. hi,

    I bought some pictures from outside the eu.
    I got a bill charging me vat not just for goods, but for vat on freight.
    I didn’t know you were charged vat on delivery costs, is this the case?

    thanks for any advice anyone has to give.

  10. Hi, I’d appreciate some advice on my situation relating to a FedEx invoice.

    My 12 year old son was sent a gift at Christmas from his uncle in the USA. It was delivered to my mother’s address as that’s where we were visiting over Christmas.

    Like everyone else an unexpected invoice arrived at my mother’s house a few weeks later for VAT & advancement fee.

    My question is can FedEx enforce an invoice sent to a child at an address they don’t even live at?!

    • Hi there,

      Fedex have a legal obligation to collect the VAT no matter where or to whom it’s sent, so you’ll not avoid that under any circumstances.

      However, the advancement fee is something else entirely. So follow the process in the post above stating that you have no contract with Fedex and are thus not obliged under UK law to pay it.

      Hope that helps and let us know how you get on.

      Karl

  11. Great post, thanks.

    But how did you manage to pay only the Vat charge over the phone? Does it not take payment for the full amount when you enter the invoice number and you card details?

    • Hi Will,

      when I phoned them up I simply said that I’m only paying the VAT amount. No business can legally take more from your card than you state that they can.

      Hope that helps and please let me know how you get on.

      Karl

      • Hi Karl

        I paid via bacs in the end and sent them an email, just had a response from them after just under 2 weeks and they have accepted it but only as a goodwill gesture and no credit will be issued in the future. They mention that their terms are legally binding and enforceable.

        Well I think I’ll be thinking twice about using fedex again in the future for international orders.

        Thanks again for your help Karl

        Will

  12. I have a different problem. Fedex started sending letters to my address just before Christmas. I returned them unopened and said that the named person doesn’t live here and never has, at least not in the 15 years I have. I keep getting letters for that person and the last one I opened. I called Fedex and explained the situation and they said I have to pay the bill regardless and then take it up with HMRC or they will start legal action. Why should I pay a bill for a parcel not received, not requested and not in anyones name in this household? I’ve told them I’m not going to pay anything and they need to refer back to whoever shipped and paid for the goods as I have no contract at all with them. I’d like your opinion please.

    • Hi Karen,

      This seems to be one of those ‘guilty until proven innocent’ situations. But here’s my view (and I must state that this just my opinion and doesn’t constitute legal advice, it is just my understanding of the law around this).

      I would write to FedEx (yes an actual letter, with proof of postage) and explain to them that you have nothing to do with what they’re trying to charge you for. If you (or anyone else in your household) haven’t received any goods, didn’t order any goods and the invoice isn’t even in your name then FedEx haven’t a legal leg to stand on.

      They can tell HMRC all they want but if they can’t prove that you have ordered or received any goods then they have no legal case either.

      The only case where this might have happened is if someone has stolen your card details and ordered stuff for you. But, from what you’ve written, seems unlikely.

      Hope that helps and please let us know how you get on.

      Karl

  13. Hi Karl,

    I really need your help please!

    I ordered a Go Pro from the US and asked for it to be delivered to the UK (in order to save a few quid in the process, ironically). According to the final order, there was $0 tax and $70.39 shipping & handling costs, which I obviously paid for, having no choice. On http://gopro.com/support/articles/customer-responsibility-for-import-duty-vat-other-taxes-outside-us , I am assured that VAT is included in the item price for deliveries to the UK.

    Having received the Go Pro, I am now being chased by FedEx for a delivery invoice of £100.96! I never knowingly entered a contract into paying this fee.

    In the Go Pro email acknowledging the order, they said “Customers with shipping addresses outside of the USA are responsible for all duties, import taxes, and brokerage fees. These costs are not included in the price of shipping/handling of your order. Customs, duties, and taxes vary widely from country to country and can be as high as 80% of the total value of your order; please check with your local customs agency for details regarding exact costs.” Inevitably, I didn’t do this in the first place.

    Do I seriously have to pay £100 extra?

    Thank you

    Rory

    • Hi Rory,

      here’s what I would do in your situation: I’d write to FedEx and ask them for a copy of the signed contract that exists between you and them for this delivery charge. I would further explicitly ask for the bit of paper that details these charges and has your signature on it signifying that you agree to the fees.

      I’d also make sure that no such T&C’s exist on the vendors website from where you bought the Go Pro. If there are no explicit terms where you agree to paying FedEx this delivery fee then, in my experience, you have no binding contract with FedEx.

      FedEx may come back to you with your delivery note where you will have signed for the goods where delivery terms may have been hidden, would be wise to check this. In this case, I would ask FedEx at what point you were explicitly notified of these charges.

      Every company that does business with consumers in the UK is legally obliged to notify you of charges before you agree to any transaction. Should they fail to do that then they will find it hard to gain any legal basis for action.

      This kind of money is worth fighting for so start here.

      Let me know how you get on.

      Cheers
      Karl

      p.s. I must point out that this just my opinion of the situation and what I would do in your shoes. I’m an activist and not a lawyer and, as always, this does not constitute legal advice. Thus, while I hope you win this case, I can accept no liability for how things turn out.

  14. Hi Karl,

    I ordered some security cameras from Shenzhen, 2 weeks later I received the Duty/Taxes invoice from Fedex. As expected they’ve charged Duty, VAT on top and a £10.50 admin charge.
    I plan to challenge the admin charge as you described but firstly I am trying to challenge the import Duty.
    They processed the duty at 14% using trade tariff code 8525809900, which appears fair enough (see the following link)
    https://www.gov.uk/trade-tariff/commodities/8525809900
    but I called the tariff classification line and was given code 8525801920 which frustratingly seems to have exactly the same description but is only charged at 4.9% (see following link)
    https://www.gov.uk/trade-tariff/commodities/8525801920

    I was wandering where you think I stand on getting them to recalculate the duty and amend the invoice?

    Thanks,

    Andy

    • Hi Andy,

      Not so sure of this one, to be honest but here’s what I would do:

      If you think the duty classification is wrong then state why you think it’s wrong in your letter with a suggested/correct code and calculation. Make sure you give them opportunity to respond.
      Wait for their response and if you win then great. If not you need consider whether it’s worth fighting for and whether you have a good legal/tax basis for the challenge.

      The key with this is that you’re obliged to pay duty, there’s no argument there. Whether you can get FedEx to change their classification and percentage calculated may not be very negotiable either.

      Hope that helps.

      Karl

      p.s. please let us all know how you get on.

      • Hi, Karl.

        After challenging Fedex about the tariff code used they sent me a revised invoice, some £30 less than the original.

        My advice to others would be to check the harmonized tariff code on the suppliers invoice against the one used by Fedex and if in doubt call the product classification line on 01702 366077

        • Thanks for sharing Andy and you’ve raised an interesting point.

          It’s not unknown for courier companies to get the import duty (VAT) wrong when they bring goods into the country. However, in their defence, it’s often down to inaccurate or misleading labeling by the company that sells the goods.

          Regards
          Karl

  15. Hi Karl,

    My case is quite different to others. I won with a design contest and the sender(from the US) sent me(to the UK) the result piece to me. Like others, i got an invoice letter a week later i receive my package. I am on my way trying to deal the problem by emailing and communicate with FedEx. Here is one of the reply email i’ve got:

    In response to your query regarding the above referenced invoice we should explain that in order for a gift shipment to be exempt from import Duty and VAT, HM Customs & Excise have strict criteria which must be met as follows:

    I just sent my reply to them with providing more evidence and details of my case hoping for any changes.

    I need your help and advice for my next further action. Not only admin fee but also i disagree with the VAT charges they put in the invoice and trying to charge me. Because i did not “purchase” anything but being deliver with these regulation which not even suitable use for my case.

    Regards,

    W.Her

  16. UPDATE:

    sorry, don’t know why the email i was trying to paste is not appearing.

    Here is the rely email i’ve got from Fedex:
    In response to your query regarding the above referenced invoice we should explain that in order for a gift shipment to be exempt from import Duty and VAT, HM Customs & Excise have strict criteria which must be met as follows:

    1. The item(s) must be sent from person to person as a private transaction. There should be no company name stated on the paperwork, only the sender and recipients’ own names and home addresses.

    2. The value of the gift must not exceed £36.00 per person.

    3. The sender states on the commercial invoice and airwaybill that the item is a gift, otherwise, HM Customs & Excise will assume that this is a normal importation and not take the gift allowance into consideration.

    After looking through the paperwork for your consignment, we find that the criteria has not been met on this occasion. Therefore, the charges have been levied correctly.

    We would advise you monies due on a package are paid in advance by an independent carrier, like ourselves, to HM Customs & Excise to enable a speedy delivery. Our terms and conditions are such that unless the sender selects the ‘bill sender’ or ‘bill 3rd party’ option on our airwaybill when requesting FedEx to ship the goods, the recipient will be invoiced for these charges.

    We trust this clarifies the matter for you with regard to the importation of gifts into the UK.

    • Hi Winnie,

      Import duty isn’t an area I’m all that familiar with, so am struggling to help with an answer.

      What I can recommend though is that you put your question on the forum of http://www.vatexchange.co.uk where they may be able to give you a more specific answer that’s directly relevant to the Duty nature of your prize.

      I hope that’s OK and that you’ll understand my reluctance to give you uninformed opinion.

      Cheers,
      Karl

  17. I’m not long off the phone from Fedex. They’ve agreed to waive the administration fees in my case as well. It took two emails and a cool but polite phone call from me for it to happen, but at least it did, and in the end up, I was actually quite pleased with their complaints dept (though might not have been if they disagreed with me). I used your letter for the main point of my argument, so thank you for making it available online.

    I still don’t understand though why on earth they think that it is ethical, let alone legal to charge money for a service that you didn’t require or request. I don’t imagine that in any other business it would be allowed to continue. Imagine buying a shirt, and getting a bill two weeks later for an extra three buttons that the sales assistant decided to include or something equally daft like that! It just wouldn’t happen.

    L.McK

    • I agree, it’s ludicrous that they can get away with blatantly (and unlawfully) charging people for something they haven’t agreed to pay.

      So, the mission is to let as many people as possible know about things like this and hopefully companies like FedEx will learn.

  18. You also do not have to pay any duties or VAT for any imports, to the courier. These charges are between you and HMRC, if a courier, out of the kindness of their hearts decides to pay your charges for you to HMRC, then once it does so, your debt is wiped and as far as HMRC is concrned, you owe nothing. The couriers however will invoice you for the VAT because they want to claim it back, but legaly they have no right to it back as you did not give permission for them to act as your broker and to pay off your debts for you. This is why most couriers will not deliver your goods until you pay the VAT if it is a large amount. If however they do deliver your goods, you are not legaly obliged to pay the invoice they send you, as the VAT etc has already been paid to HMRC, without your permission (unless you have a contract with the courier and an account and arranged the import youself, only then have you agreed to let the courier act as your broker, if it was just something you bought on ebay and then was shipped to you by the sender, you are not legaly obliged to pay anything to the courier and they can not legaly persue it). The most they can do is employ a debt collector or sell the debt to them, but then you instantly win as law prevents debt agencies from collecting debts they have bought or are representing. You have no contract with agencies and by law you can tell them to take a hike as you will only deal with the original debtor (unless you have signed a contract agreeing otherwise, which never happens with couriers, only credit cards etc, and even then it is rare). In short, most charges, including VAT, when charged to you by the courier and not by the goverment directly, are not legal debts. Any lawyer will explain this to you. If you are an importer with an account etc it is different as it is part of their account terms, but as just a regular ebay buyers etc, if they deliver first and charge later, they can’t claim the money back, they can blacklist you from their courier company, or attempt to trick you with a debt agency, but legally you do not have to pay them a penny for anything, as they have paid the debt to HMRC for you without your permission, and it is up to you if you pay or not. Just remember that they might blacklist you or hold future imports until you pay them, but you don have to do anything, they paid off all your charges you owed to HMRC for you! You owe nothing!

    • Some very interesting points made there by Brian.

      My thoughts on this, and it’s not to take anything away from what Brian wrote, is to tread carefully.

      I’m not saying that Brian is wrong and that you don’t have to reimburse couriers for VAT that they’ve paid, I’m saying that I have no experience of this.

      Brian, it might be worth you letting us know how it is that you know this and what your experiences are?

      • I know this because Fedex sent me an invoice based on a HMRC estimate, since the sender forgot to put the actual shipping total and left it blank. In the UK you are charged import fees on the total amount, not just the product value. e.g is you pay 1 shipping and the item is worth 1000 also, you pay fees based on 2000. Fedex should have known the actual shipping total as they are the ones that arranged the shipping of the goods and charged for it, they could have easily checked this. Instead they accepted HMRCs estimate which was about 4x the amount because the sender had a cheaper rte than the standard. I refused to pay it, they said i have too. Obviously i didnt have to as all charges were paid in full to HMRC without my permission. I told them i would not pay. They referred it to a debt collector since it was now a non priority debt. I told the debt collection agency, as i always do, that as i have no contract with them i would not be paying it. 2 warning letters that i ignored and then nothing. No debt collectors in britain have any legal rights to claim any debts if you don’t have a contract with them. I didnt have a contract with fedex either the sender did, so they were both screwed. Had i owed HMRC directly it would have been a different matter, but i didn’t. Also, i have since had deliveries from fedex just fine but only from the UK not from abroad.

        • sorry missprint should have read if you pay 1000 shipping and 1000 product value you are taxed on a total of 2000, in the UK.

          Dave

        • Great Stuff Brian. I guess the annoyance is how many people would have just accepted the terms and coughed up. Makes me wonder whether Fedex actually keeps a record of how much they collect in these fees (I’m sure they do) and how much it contributes to their profits.

  19. VICTORY!!!!
    Steve 1 – Fedex 0

    I had an invoice from Fedex today for my Harmonium with the expected £10.50 VAT but with an extra ‘advancement fee’ of a further £10.50 wot!
    I got straight on the phone stating that I don’t have a contract and under UK contract law they cannot apply fees or charges as I am not their customer.

    I got nowhere with the girl on the phone as I was being really polite and she just kept saying it’s an agreement we have with the vendor :-) I asked for the legal department and got through to the area manager. I explained the same again and was reassured the fee was taken off and I just paid the VAT… Yeehaa mini tribal dance!

    Next step no VAT come on Gov put em up, put em up!

    • Great stuff Steve, thanks for sharing.

      However, I don’t rate your chances of beating HMRC on the VAT issue. I’d certainly love to hear what happens if you decide to give it a go.

      cheers
      Karl

  20. Hello Karl,

    I was just wondering whether you could help me in my case. I recently lost my iPhone while in Switzerland and it is being sent back to the UK. Seeing as it was personal property, am I correct in saying that there will be no VAT or Customs charges? I got this from the HMRC website (http://www.hmrc.gov.uk/customs/post/sending.htm) Also once the phone has been delivered by Fedex, will I also be in the advantageous position of not paying the administrative fee?

    • Hi Sam,
      You’re right, there is no VAT to pay on personal goods being sent. You only pay import duty on goods you’ve bought from outside the EEA.
      Regards
      Karl

  21. Hi Karl,
    I recently returned from a holiday in the USA where I left my phone. Alamo forwarded it by fedex at a cost of £66.47 I have now been invoiced by fedex for 14.79 disbursement outside eu vat and clearance admin charge of 10.50. If I am following this thread correctly neither charge is valid. Am correct in this assumption?

    • Hi Dave,

      sorry for the delayed response.
      The clearance admin charge is an easy one to contest, as above.

      However, on the VAT front you’ll have to make it clear to FedEx that the phone isn’t being imported, it’s being returned as a result of leaving it abroad. If you bought the phone in the UK (or even in the EU) then you will already have paid duty and thus it shouldn’t be charged again.

      Keep us posted.

      Karl

  22. Thanks for this. I am an online reseller of goods and received two shipments from China via Fedex, and have been invoiced later for £14.40 on each – £3.90 VAT and £10.50 clearance admin charge.

    I politely emailed my intention not to pay the admin charge using your letter as a template, and received this reply:

    “Dear Sir or Madam,

    Thank you for your query regarding the Duty & VAT charge on invoice 5XXXXXXXX.

    We would like to inform you that the amount billed is an ancillary charge and these are raised on shipments that require a specialised clearance procedure through Uk customs.

    Under certain circumstances additional fees are payable to FedEx for the clearance of goods, for example to cover fees paid to external agencies for border inspections or for non-standard clearances. The invoice may also cover all other services not covered by the standard conditions of FedEx.

    The charges raised for this additional service are specifically billed to the consignee/importer rather than the shipper. The charges remain the responsibility of the consignee/importer as they relate to the importation of the goods through Uk customs.

    We trust that this helps clarify this matter for you and look forward to receiving your payment in settlement.

    Yours Faithfully,

    Sounds like nonsense to me. I’ve reiterated in a reply that they still have no legal ground to charge me for the ‘administration’ of my parcel, paid the VAT due on each parcel and stated that I trust the matter to be closed.

    Let’s see what happens…

    • In this case I would ask them to show where you expressly agreed to any of their terms and conditions. Under UK consumer law (or any UK contract law) no company can impose any terms after the deal has been done unless you explicitly agree to them.

      However, the caveat is: make sure that these T&C’s aren’t included in the sellers terms first. Normally most vendors simply state that you’re liable for any import duties and ‘other charges’. This is certainly not an explicit agreement to any clearance or admin charges imposed by courier companies.

    • Thank you for the advice!

      I paid the VAT only and then wrote an email based on the original one posted here. Eventually got the same reply as shreddedmeat. I ignored it, waiting to reply to the next email from them. My patience paid off and I got this email today:

      Thank you for your query.

      By way of explanation, all goods entering the UK may be liable for import charges in accordance with HM Revenue & Customs regulations. Any monies due on a package are paid in advance by the carrier to HM Revenue & Customs so that the goods can be cleared and delivered in a timely manner. For this advance payment, FedEx charge an administration fee to cover cost of the use of our deferment account with Customs. A deferment is an account we hold with Customs, this is the only way Customs will accept payment for import charges unless you employ your own broker. FedEx charge 2.5% of the total duty and taxes or £10.50 whichever is greater.

      However, on this occasion I have issued a credit for the Advancement fee and a credit note will be posted to you shortly.

      Regards,

      Jagdeep Jutti
      Customer Relations.
      FedEx Europe, Middle East, Indian Subcontinent & Africa

  23. Thanks for this advice. I didn’t know this. I have just paid Fedex only the VAT and have sent them an email very similar to the one that you sent saying to remove the £10.50 charge from my account. I will let you know what happens.

  24. Hi Karl,

    I recently recieved an unsolicted gift from the USA via FedEx. I promptly returned the gift by airmail (much cheaper). However FedEx are asking for £39 for VAT and Admin. Not really sure how to proceed. I didnt ask for the gift, did not expect the gift and did not enter into a contract with any person or company. This is a very questionable practice by FedEx. I really can not see how I can be expected to pay for anything in these circumstances… What would Karl do?

    Thank you in advance for any advice you may have.

    Best Regards

    Nigel

    • Hi Nigel,
      yes, that’s a very interesting case. And here’s what I would do:

      To begin with I’d ignore FedEx until they contact you again (if they do). At which point I’d write to them and let them know that you did not purchase the item delivered, did not order (or even ask for) the item delivered and have since returned it to sender. Thus you entered into no legally binding contract that would make you liable for VAT or admin charges.

      Hope that help and let us know how they respond.

      Good luck,
      Karl

  25. I received a gift from USA and am now being charged VAT which is almost £50! This was a surprise gift. I never entered into no contract with no one. I only received the gift from FedEx. I didn’t even know about it until it arrived at my door. Why on earth am I being charged, surely it should be sent to the sender and not me? It’s ridiculous, and I am refusing to pay it, any advice or opinions about this would be much appreciated. Thanks

    • Hi Molly,

      thanks for your question. I’m not a VAT expert but after a little bit of research I can say this:

      The quick answer is that if your gift is valued at over £36 then you will have to pay VAT (import duty). This is because calling something a gift would be a convenient way for folks to unscrupulously avoid paying VAT. And I’m fairly sure that HMRC wouldn’t want to open that can of worms.

      So yes, you’ll have to pay the VAT (or try and get the sender to pay it).

      Sorry I can’t be of more help.

      cheers,
      Karl

      • Hi Molly,

        I had a similar situation (unsolicited/surprise gift from USA) where FedEx wanted to charge me VAT and Fees. I wrote to them and explained that I had not entered into a contract with either FedEx or the sender and at no time did I ask FedEx to act as a broker on my behalf or pay any monies on my behalf. I also explained that I had the protection of UK Consumer law and UK Contract Law. FedEx decided to drop the matter. As I understand it, even if you had signed for the package it does not make you liable for any charges that have been payed on your behalf without your express permission.

        I hope tjhis is helpful.

        All the best

        Nigel

        PS Thanks to Karl for intial advice!!

  26. Karl, thanks for this website. I used your approach regarding an item I purchased in India and had shipped to the UK. Totally forgot about the VAT charges when i bought it! I was willing to pay those but not happy to pay the admin charge. Used google and your wonderful blog came up. I spoke to someone on the phone to begin with who had clearly be trained to say “the computer says no”. She put me through to her boss who was very similar and even tried to send me some literature to justify the charge. I decided to ignore her email and instead pay just the VAT over the phone and instead sent a generic email asking for my payment to be confirmed as received and for them to waive the admin fee charge based on your template above. Worked a treat! Thanks again

  27. Hi Karl,

    I had not heard back from Fedex so contacted them again and they have removed the £10.50 admin charge! Thanks so much for this blog. It has been invaluable.

    Sally

  28. Hi Karl and everybody!
    I received admin charge credit as well £10.75. But I have paid my invoice and then found your website and contacted FedEx. They confirmed that I need to pay VAT only. But they didn’t read carefully my message. It says that I request a refund. Contacted again. At the moment waiting for the reply. I don’t really care will I get my money back. But this information will help me in my business in the future. Thank you for sharing with us your experience.

    • Hi Olena,
      thanks for getting in touch. Not sure I rate your chances of a refund but good luck anyway.
      Cheers
      Karl

  29. Hi Karl,
    I have had similar letters (Fedex sent me 2), but my circumstances are slightly different, I wonder if you could advise me.

    A friend of mine in America bought me a present online and had it shipped to me from America to Britain. I didn’t purchase this item, nor did I sign for it when it was delivered, yet I have received a letter from Fedex with VAT charges of £8.37 and a £10.75 advance fee.

    As I had no idea about the gift until I came home and found it waiting for me, am I still liable for the VAT? I also don’t understand how being a recipient of a gift leaves me with regard to agreements in the contract law you wrote about. Any advice is welcome, thanks.

    Ross

    • Hi Ross,
      thanks for the comment and the question and I have mixed news: Sadly there’s no avoiding VAT, even if it was an unsolicited gift.
      I checked this out with a VAT specialist recently and she concurred that duty is payable. HMRC seem to take a blanket approach because anything else would open up a huge problem about ‘everything’ being labelled as gifts to avoid the duty.
      On the brighter side, you should easily be able to get out of the admin charge.
      Good luck,
      Karl

      • Thanks, for the reply. I think it’s great that you are still keeping this thread active given how long it has been running. I appreciate the advice.

        Regards,
        Ross

  30. So I’ve an odd one. Any advise would be appreciated. I purchased a number of sports supplements from the states. I have them shipped to a bybox account in the UK. Last november I received a bill from Fedex for all of the above fees. VAT, import, admin charge. I was advised by bybox that my items couldn’t be released until the fees were paid. The total for the purchase was 320 usd and the fedex invoice was a total of 68gbp. I paid the fees and my items were delivered. All good then? No. So, this morning (months later) I have now received a final warning bill from Control accounts (some 3rd party used by Fedex) to collect 397 gbp!! I called control to query the fees and they have informed me that Fedex did not bill me the correct amount and it has been sent to them for collection. This is the first I have heard of this, Bybox are now holding all my packages until this is cleared. This is the first communication that control/fedex have issued to bybox also. Advise? Opinions?

    • Hi Michael,

      yes this is an odd one and a little beyond the scope of what the original post is about.

      In my view the issue is a contractual one between you, FedEx and Bybox and would involve scrutinising the agreements that FedEx and Bybox have between them that would enable Bybox to legally withhold your packages. In all honesty, I wouldn’t really know where to start with that.

      However, all is not lost (and I know this will sound like a cop-out) but you could try posting your problem onto the UK Business Forum in one of the legal help boards to see if someone more adequately qualified can give you some direction. http://www.ukbusinessforums.co.uk/

      Sorry I couldn’t be of more immediate help but good luck and keep me posted with how you get on.

      All the best
      Karl

  31. Hi Karl,

    First of all I want to thank you for this site and all your advice on how to beat, what is frankly a con by Fed-Ex. I ordered a t shirt from US website to UK and it arrived via FE in about ten days. Then around two weeks later I got the fed ex letter wanting £17.28 from me (£10.75 Clearance Admin Charge; £6.53 in VAT). So I paid the VAT and sent an email why I did this also stating that I did not enter into a contract with Federal Express Europe plc). Heard nothing for about four weeks then I get another letter in the post demanding payment of the £10.75, saying I have seven days to pay or “immediate legal proceedings may be issued against me”. There was nothing in this letter countering my original reasons for not paying the CAC.

    I will contract them via telephone to see if they response to this email. I will keep you updated.

    Rgds,

    Scott

    • Hi Scott,
      thanks for your comment. In your shoes I would stick to my guns and maintain that you did not expressly agree to any charges by FedEx. Ask them for evidence of contract between you. You might even want to copy the vendor’s T&C’s and send it asking them where you agreed explicitly to pay FedEx any money.

      Good luck and keep us posted.
      Karl

      p.s. remember that what I’ve written shouldn’t be taken as legal advice, it’s just my opinion.

  32. Hi Karl, thanks for your reply. I send another email to Fed-Ex, but I decided to call them also, I explained the situation to a fed Ex customer representative and they agreed to “recredit” me the clearance admin charge so I got a result. Their systems are awful, when I received email confirmation of the recredit they stated I still owed them the VAT duty!

    Thanks again,

    Scott

  33. Hi,

    I was sent a small video camera by post by a US production company to do some filming, which I then returned to them. This was never my property and they paid for all the postage via their account.

    However, I’ve since had an invoice for duty/charges as the other company didn’t tick the box to say they were paying it. They’ve now gone quiet and are not replying to my requests for them to sort it out.

    Do you think there is any way round this if they don’t reply? Am I really liable for charges of something I never paid for or posted? Hopefully the US company will pay this but I want to be ready just in case.

    Many thanks

    James

  34. Hi Karl,

    I have an interesting situation currently with FedEx – i bought something from a UK website, where they state an ‘all in’ price with no hidden extras. after a few days i got an email with tracking information for my shipment from FedEx – you can imagine my surprise when i noticed the sender is in China. never the less, the items turned up ok and all was well, however i have subsequently received an invoice from fed-ex for £15.14 consisting of 4.39 for VAT and 10.75 for ‘advancement fee’

    are they gonna throw me in prison if i ignore their letter?

    Thanks,

    Garry

    • Hi Garry,

      In my view (and it is just my opinion) you believed you were buying from a UK company and the VAT should legally have been included in the price.

      However, you need to scrutinise the vendor’s site and all T&C’s to check the business address of the company. If it’s china (despite the .co.uk domain) then you’re liable for paying the VAT. If it’s a UK address then you’re not liable.

      The advancement fee should be fairly cut and dry by now.

      Keep us posted and good luck.

      cheers
      Karl

      • some feedback for you…i elected to not contest the VAT part of the charge, for the sake of £4 the hassles were not worth it…i did however refuse to pay fedex fee, which they wavered without any resistance. thanks for your help!

  35. Hi James,

    I’ve Passed this over to a friend of mine who is a VAT expert who will be able lto help since I’m not sure how to approach it.

    Karl

  36. You don’ t say who sent the invoice for the duty/VAT charges or how much money is involved. But either way, it may be possible for you to have the charges removed because the camera was only imported temporarily.

    Anyone who has ever had to deal with the occasional import/export issue knows that it can be a messy and labourious process, so it’s not surprising if your US client didn’t understand the rules.

    I should say that I’m a UK VAT consultant, not an expert on import procedures. But I’ll do my best to point you in the right direction and tell you where to find additional information.

    In principle, if you import goods on a temporary basis (usually up to 24 months), then you can import them into the UK without paying duty or VAT. However to do this, the importer (i.e. you) has to make a declaration to HMRC at the time of importation for “temporary admission relief” or “TAR”. Usually this is done by completing the standard import document, a C88, which is also referred to as a SAD. I suspect that your camera was sent by post, in which case you’d probably have to made the declaration at the local post office.

    Obviously you didn’ t do this, but it might still be possible to claim the relief retrospectively. The TAR procedure is explained in HMRC Notice 200: Temporary Admission http://tinyurl.com/nhasb8h and the provisions for claiming retrospective relief are in section 5.1 of the notice.

    However before you get bogged down in trying to make sense of the Notice, I’d suggest that you read section 5.1 and then call the Customs Helpline (0845 010 9000) and discuss your situation with someone there. They will do their best to help, though unfortunately I’ve found that the qualify of the responses isn’t always consistent and different officers might give different information. Their information probably won’t be wrong, but might be incomplete or just a bit inaccurate. That’s usually because some officers have more experience of different issues than others and may have limited knowledge of the TAR procedure. Sometimes you just need to be persistent!

    I’m sorry I can’t be more helpful, but at least you have somewhere to start. And if you have any other specific customs/VAT issues, please feel free to put them on the forum on my website http://www.vatexchange.co.uk and I’ll do my best to help.

    Marie

  37. You can also check out my recent blog where I’ve explained the main procedures for dealing with queries and requests for refunds for personal imports. Hope this helps!
    Marie

  38. Fedex give you immediate delivery and pay your duty and vat on your behalf. The sender will usually have something in his T&Cs about you having to pay taxes and fees. This is how business is done. Most people in this discussion thread are getting wound-up over nothing. How do you value your time?

    • Thanks for your comment John and you’ve raised a good point. Yes we should consider whether fighting the charge is worth the time.

    • I probably wouldn’t bother challenging a relatively small charge, but £5 or £10 is a lot of money to some people.

      I may have agreed to a contract with the vendor to pay taxes and charges, but does that legally bind me to paying a third party, other than HMRC? I’d always assumed that the “taxes and charges” clause referred to costs incurred by the vendor, not third parties. But then I’m not a lawyer.

  39. Hi
    Same story bought goods outside EU value of £16 plus shipping charge £3
    package delivered fed ex ],
    4 days later got an invoice from fed ex for EU vat £3.86
    and surprise surprise clearance admin charge vatable £10.75.
    Thanks Karl and everyone have e-mailed fed ex now waiting for an response.

  40. Thankyou! I Just read this called 0800 1691960 (fedex freephone UK) asked to be put through to the billing department and told them i would not be paying the advancement fee. They waived it without a fuss!

    Cheers! £10.95 saved :D

  41. Hi I ordered a christening gown and extras from the USA, they arrived promptly. I Just received an invoice from FedEx saying I owe duty of £18.36 and VAT of £38.71 and clearance of £10.75. Total being £67.82

  42. Interesting thread, Karl. I’ve probably made a mistake in my approach to fedex and their advancement fee of £10.75, because I wrote with a cheque for the amount of VAT and £5 in view of the clearance service that I accepted they had provided, but objecting to paying more as I had not been given the chance to pay in advance. Just had an e-mail from them saying “Having reviewed the above mentioned invoice, we can now confirm that a partial credit of 5.75GBP has been raised,
    FedEx will not issue a revised invoice and therefore we look forward to receiving payment for the remaining balance on this invoice.”
    Am considering my next move. Since the VAT was less than £22 I think a 50% advancement charge is a bit much!
    Any advice? I don’t want them to start rolling up collection charges!
    Alison

    • Hi Alison,

      sorry for the delayed response. Here’s what I would do:

      If they send you a bill for the balance write them a letter/email saying that since yo hadn’t entered into contract with FedEx then you don’t feel obliged to pay the rest and only paid the first part as a gesture of goodwill.

      Having said that, there is a risk that you may be obliged to pay the balance since you acknowledged the fees and paid part of it in the first place.

      Good luck and let me know how you get on with this.
      Karl

  43. Hello everyone

    Im new here ( my english its not perfect so im sorry ;) )

    I bought some things form american designer website
    Fedex has a contract with them, so I received my parcel almost 2 months ago…last week ( 14 f september ) fedex sent me a letter I hace to pay “disbursements out of the scope EU VAT -£60.18 and ” clearance Administration Charge ” – £10.75 !

    if I knew I will never buy anything from US
    can anybody tell me do I really have to pay all Tax now?

  44. Hi Karl
    Thank You for reply me
    So shall I contact with Fedex now and ask how much do I have to pay?
    and another question how many days I got to pay them?

    Kind regards

  45. I wonder, does this apply to UK only or, in other countries as well? I am right now in a similar situation, but the country the item is in is Denmark. I don’t live there so I am not accustomed to their laws (item was a gift for my girlfriend that is doing her Erasmus there)

    • Hi Alex,
      It’s a good question but I’m unable to give you an answer on this. Chances are good that similar laws exist in Denmark but I wouldn’t say for sure.
      Sorry I can’t be more helpful.
      CHeers,
      Karl

      • Hi Karl,
        Just a small update from me. I can confirm this worked also in Denmark, fedex replied to my mail today and agreed to cancel the fees regarding their administration fees. Your blog post has been an invaluable source of help.

        Thank you for taking time to write it and share with us all.

        • Thanks Alex,
          That’s good news and I’m glad it worked for you, thanks for letting us know.
          It’s highly likely (although I couldn’t say for sure) that this applies across the whole EU.
          cheers,
          Karl

  46. I also E-mailed fedex today and got a response back in three hours as below:

    Thank you for your query regarding invoice 547558296.

    We can confirm that we have now completed our investigations and are pleased to advise that a partial credit of £10.75 has been raised, leaving an amount still due on the invoice of £12.97.
    We look forward to receiving your payment for the remainder of the invoice.

    If you have any further queries, please do not hesitate to contact us.

    Yours Faithfully,

    Dinesh N

  47. I’m probably going to make myself very unpopular here but (after getting over the initial shock the first time) I’ve always felt it fair enough when I get charged a fee. What I’m doing when I order from abroad is importing something without doing any of the required processes (which you can do yourself if you want to avoid the charges from the courier). This responsibility then gets dumped on the delivery company who do the calculations, make the package available to HMRC (including unpacking and repacking if required). The delivery guys then pay the customs charges out of hand, put the package back in the system and deliver it. Having looked at what I’d have to do to sort this out myself I certainly feel this is a valuable service I’ve been provided with – well worth a tenner anyway.

    Anyhoo, with that in mind: The Question.

    If you feel you were unfairly billed for a service you didn’t want would you prefer for the delivery company to leave your package in limbo until you sort the charges out yourself? (Although how would you feel about being billed for storage by the courier while you deal with HMRC?)

    If you really didn’t want this service then why didn’t you get arrangements in place before the package was sent – this would have avoided any uncertainty on the part of FedEx as to whether you wanted them to clear it or not? If you don’t want to do it yourself then who should and why should they do it for free?

    • Hi Laurence,
      I can see your point of view but Fedex aren’t exactly doing anything for free in that the sender pays for their service. Not only that but Fedex has the systems in place to handle VAT and the sending of invoices for VAT and the collection process is fully automated.
      I don’t think anyone would want to have to deal with HMRC directly but it’s not as though Fedex do it out of any kind of altruism.
      The main point of this stream is that these additional charges by Fedex are added without the recipient’s permission or knowledge, thus making them unlawful. If the sender and recipient were notified explicitly in advance then I don’t think anyone could complain. However, typically, not even the senders are aware of these admin charges so it could be argued that Fedex are playing a sneaky game and boosting their profits in doing it.
      Cheers,
      Karl


Leave a comment

No trackbacks yet.