FedEx UK Charging VAT on Chrismas Gifts from USA

Bryan Mills

Hello All,
I'm Irish based in California. Last Christmas I sent 3 simple items of clothing, worth $40 each to my parents. A jacket, a shawl and a blanket (items purchased in a Sale, true value say $60 each). I used FedEx service for this shipment as in the past the Irish Postal Service has let me down on Christmas delivery. The package was delivered in the time promised however 2 weeks later my parents received an Invoice from FedEx for 75 Euros for VAT and various other charges. Now here's the kicker, the package was clearly marked as gifts and it was opened first in Europe in the UK .. (I assume FedEx routes shipments via UK to Ireland). After many e-mails to FedEx staff (usually with low IQ and poor English off shore) they have now turned over this Invoice to a UK collection agency and are sending demanding letters for the 75E+ 20Euro 'fees' .. this is so annoying..
My question is, can a UK based Debt Collector really collect on this 'debt' with an Republic of Ireland resident or can we tell them to Foxtrot Oscar with their demand. If there was ever a case of 'its the principle not the money., this is it'
Any advice is very much appreciated.

rubadub

The limit on gifts is €45, which includes postage, so you were still liable.

How much was the fedex price, VAT is due on that. They may have overvalued your items if you did not include receipts or any notification of value.

If €75 is the vat they are valuing your item & shipping at €326.

Some people have told couriers to go away and some did. Can't remember what they said to them.

Bryan Mills

Thanks for the reply. I have an airline employee discount privilige with FedEx so my bill to ship the items was $45. (Normally that would be say $200). I declared the value of the items to be $100 for insurance purposes.
Is this a case of FedEx 'dropping the ball', ie they should have requested payment before delivering the items ? Or in other words, they were charged by the UK taxman and then they failed to collect and are now scrambling .. I still want to tell them to FO. Too late, they made the mistake..
Also I'll not be sending anything in future via them (Irish Postal Service never 'pulled this one' and I've sent many boxes of gifts over the past 20 years..)
Thanks again for your advice.

MojoMaker

No 'fast one' was pulled, you knew there would be a charge, you knew the gift limits. You'd have to be some eejit to assume you 'got away with it'. The fact the charge has followed the delivery by some weeks tells you that FedEx settled this on your behalf and have extended you a grace period to settle with them. Marking something as a gift makes absolutely no odds whatsoever in terms of dodging VAT and/or import duties.

Pay them what you owe them and chalk it down, there's no mystery here.

Bryan Mills

@MojoMaker :  No I didn't know the gift limits .. I've been sending items for 20 years, why is this happening now? Remember these were low value items, I suppose if I was sending a diamond ring, I would have declared its value accurately and would have expected the tax.. no question. But for 3 small personal items @ Christmas ..  wrapped in Christmas paper ..  
No not an 'eejit' my friend .. just would like to know why a tax is due for such items, the 45 Euro limit is I assume is a person limit, the package was addressed to 2 people so the total tax free amount should be 90 Euro (at current exchange rates $100), the amount valued on the items ..  Paying VAT on the shipping charge .. well that's a total one to me (per other poster) .

ytpe2r5bxkn0c1

Bryan Mills wrote: »

@MojoMaker :  No I didn't know the gift limits .. I've been sending items for 20 years, why is this happening now? Remember these were low value items, I suppose if I was sending a diamond ring, I would have declared its value accurately and would have expected the tax.. no question. But for 3 small personal items @ Christmas ..  wrapped in Christmas paper ..  
No not an 'eejit' my friend .. just would like to know why a tax is due for such items, the 45 Euro limit is I assume is a person limit, the package was addressed to 2 people so the total tax free amount should be 90 Euro (at current exchange rates $100), the amount valued on the items ..  Paying VAT on the shipping charge .. well that's a total one to me (per other poster) .

You, understandably, are looking for excuses and a way out but the parcel exceeded the value allowed. Vat and Duty are due. As is an admin charge from FedEx and, now, the additional charge for a collection agent. It's tough but thus is the reality of trade agreements and non EU imports.

Bryan Mills

@Srameen .. please explain to me by how much the parcel exceeded the 90 Euro limit ? What is the limit on the parcel to 2 people ? 90 E I assume .. I declared $100 .. so a wash .. No tax should be due .. 
Believe me I pay a fair share of taxes in the USA, I'm not trying to evade what is fair and reasonable.. Getting FedEx to explain their reasoning .. like asking for the square root of an apple !  
Thanks !

rubadub

Bryan Mills wrote: »

Is this a case of FedEx 'dropping the ball', ie they should have requested payment before delivering the items ?

this is how they normally operate. I think they should not be allowed do this. I don't think they even tell the receiver that money will be due, let alone the amount, and I think this is how others got away with telling them to go to hell. (they are obviously allowed do it, I just wish it was illegal) Other couriers tell you upfront of charges.

It may result in parcels being delivered a little quicker but my theory is the main reason is to cut down on refusals from receivers. If the parcel was refused I imagine they have to return it, and they may not charge the sender. They also miss out on their substantial admin fees.

I am not sure why the couriers often tend to overvalue items so much, my theory is that they must have some vested interest in doing this. Of course valuing high can get it into the VAT applicable range from the start, so they get their admin fees. Some also charge admin fees as a % of the amount they collect from you, so it is in their interest to value it as high as possible, you pay loads more, while they make just a very small amount more.

There is a upper limit to how much they can request in admin fees, some already charge the max as a fixed rate -in which case they are not getting more money by valuing it higher based on admin fees. However I still think something has to be going on, perhaps they get some % collection fee from customs, I would love to know the workings of it.

MojoMaker wrote: »

Marking something as a gift makes absolutely no odds whatsoever in terms of dodging VAT and/or import duties.

yes it does, the limit is raised to €45. If they were sent in 3 packages via an post I bet they would have got through.

MojoMaker wrote: »

there's no mystery here.

the €75 VAT is a mystery.

Bryan Mills wrote: »

What is the limit on the parcel to 2 people ? 90 E I assume

Doesn't work like that, if it did everyone would be saying its a gift for a family of 20

rubadub

Bryan Mills wrote: »

Paying VAT on the shipping charge .. well that's a total one to me (per other poster) .

anecdotally it seems an post do not include the shipping in their original determination if VAT is due or not, but do include it when pricing the VAT if you are liable.

What I mean is if you sent a €6 gift for €40 postage via an post, then I reckon it would have gotten through, even though it is over the gift limit of €45. If you sent the same through fedex or DHL its likely they will get you for VAT, which allows them get the high admin fee.

This is just anecdotally what I have seen happening to me, family, friends and people online. It is rare enough to see people bitching about an post.

Your first comments about previous parcels getting through with no charge via an post only strengthens my belief.

selous

Almost the same thing happened to me some years back.

I ordered a pair of duty boots online, they were delivered by Fed-Ex, when they were delivered I asked was there anything to pay on them, (as they came from outside E.U) the guy said no, happy days, I thought, they fit perfectly, so ordered another pair a week or so later.

A week or so after the second pair arrived a Tax/duty/handling charge arrived from them, cant remember exact amount but it was around E40 and two weeks after the second pair arrived the second bill arrived, for near E50, boots were same price, I emailed them, no reply, phoned them, worthless, emailed again half assed replies, with one good piece of info, "we do not advise of charges unless they are substantial".

I rang Comreg and asked them about it, that guy says You are supposed to be advised of all charges on or before acceptance of a packet" without me saying who it was he knew.

I didn't pay it, and got them letters you mentioned, your credit raring will be damaged, you'll never get a loan etc.

A friend of mine who worked in a solicitors office said they'd type up a letter and send it to them about the comreg advice, just to see what happens, I never got another letter from them, I've also never used them again or ordered anything from a site that uses them. I've also since got a mortgage and car loan, so it didn't damage my credit rating..

But it's bloody annoying to get a bill of charges weeks after you get a packet, (Where you've used or worn what was in the packet,you cant refuse them then) DHL send you a letter before, An Post advise at the door, why are Fed-Ex so special?

Bryan Mills

Thanks all for the replies .. Instructions from me is to tell FedEx to Foxtrot Oscar on all and every request and letter from here out. I told my parents to never sign for anything, from anyone :  the armchair lawyer in me tells me that nothing good can ever come in an envelope that you have to sign for ..   Have a nice day ..

Bryan Mills

@ Selous :  Exactly, FedEx should not be allowed this inverse 'bait and switch' behavior , either collect the money at the of time delivery or not.  I guess it was too good to be true to use FedEx at the special rates.. Back to US Postal Service and An Post .. or better still bring the items in a suitcase on one of my many trips to Ireland.
PS. Cannot believe the level of incompetence in An Garda Siochana I'm reading about .. here they would be all cleared out in 5 mins flat !

whiterebel

rubadub wrote: »

this is how they normally operate. I think they should not be allowed do this. I don't think they even tell the receiver that money will be due, let alone the amount, and I think this is how others got away with telling them to go to hell. (they are obviously allowed do it, I just wish it was illegal) Other couriers tell you upfront of charges.

It may result in parcels being delivered a little quicker but my theory is the main reason is to cut down on refusals from receivers. If the parcel was refused I imagine they have to return it, and they may not charge the sender. They also miss out on their substantial admin fees.

I am not sure why the couriers often tend to overvalue items so much, my theory is that they must have some vested interest in doing this. Of course valuing high can get it into the VAT applicable range from the start, so they get their admin fees. Some also charge admin fees as a % of the amount they collect from you, so it is in their interest to value it as high as possible, you pay loads more, while they make just a very small amount more.

There is a upper limit to how much they can request in admin fees, some already charge the max as a fixed rate -in which case they are not getting more money by valuing it higher based on admin fees. However I still think something has to be going on, perhaps they get some % collection fee from customs, I would love to know the workings of it.

yes it does, the limit is raised to €45. If they were sent in 3 packages via an post I bet they would have got through.



the €75 VAT is a mystery.


Doesn't work like that, if it did everyone would be saying its a gift for a family of 20

I have explained a few times in reply to your posts which you seem to suggest there is a conspiracy to pick people's pockets, but you studiously ignore them and persist with the fantasy.
I actually posted up the links for DHL to show how they calculate shipping from their published tariff. The courier doesn't charge the actual freight, they use it to calculate the VAT/Duty as they are instructed by Revenue. The VAT and/or Duty is for Revenue alone - no finders fee or "cut". There is nothing extra in it for the courier. Goods with no value have to be researched for a value as close as possible, and if thats from a more expensive supplier, tough.
An Post are everyone's favourite because they let things through that they shouldn't - Do they care? They are semi-state, so I doubt it. They do a customs entry, input all the details, looking for the tariff code, description, send the entry electronically, wait for the reply, do up a docket with the COD amount on it, which they have paid on your behalf - for €7??? No wonder they are losing a fortune, but as long as we can bring cheap product in, who cares because they increase stamps by 25% instead.

I don't work in the clearance business, but I know a lot that do, and worked in it myself for years.

Fedex Fees from their website: http://www.fedex.com/ancillary/go/service/?pt=cl&lc=en_US&wcc=ie&dc=ie

Can't find the rates for TNT but they are owned by Fedex now, so rates will probably be similar.

DHL :http://www.dhl.ie/content/dam/downloads/ie/Express/shipping/rate_guides/express_service_surcharges_ie_en.pdf

dudara

Moved to Online Buying & Auctions, better suited there

ohnonotgmail

whiterebel wrote: »

I have explained a few times in reply to your posts which you seem to suggest there is a conspiracy to pick people's pockets, but you studiously ignore them and persist with the fantasy.
I actually posted up the links for DHL to show how they calculate shipping from their published tariff. The courier doesn't charge the actual freight, they use it to calculate the VAT/Duty as they are instructed by Revenue. The VAT and/or Duty is for Revenue alone - no finders fee or "cut". There is nothing extra in it for the courier. Goods with no value have to be researched for a value as close as possible, and if thats from a more expensive supplier, tough.
An Post are everyone's favourite because they let things through that they shouldn't - Do they care? They are semi-state, so I doubt it. They do a customs entry, input all the details, looking for the tariff code, description, send the entry electronically, wait for the reply, do up a docket with the COD amount on it, which they have paid on your behalf - for €7??? No wonder they are losing a fortune, but as long as we can bring cheap product in, who cares because they increase stamps by 25% instead.

I don't work in the clearance business, but I know a lot that do, and worked in it myself for years.

Fedex Fees from their website: http://www.fedex.com/ancillary/go/service/?pt=cl&lc=en_US&wcc=ie&dc=ie

Can't find the rates for TNT but they are owned by Fedex now, so rates will probably be similar.

DHL :http://www.dhl.ie/content/dam/downloads/ie/Express/shipping/rate_guides/express_service_surcharges_ie_en.pdf

while the vat/duty is for revenue alone the courier companies do charge a fee for processing the vat/duty. It is in the region of €15. they add this on top of the vat/duty.

whiterebel

ohnonotgmail wrote: »

while the vat/duty is for revenue alone the courier companies do charge a fee for processing the vat/duty. It is in the region of €15. they add this on top of the vat/duty.

Yes, I included the clearance rates for FedEx and TNT to show their charges.
The suggestion is being made that there is something more in it for couriers to bump up the value for VAT and Duty. They all seem to have a percentage, with a minimum of approx €15. I actually lay out what An Post have to do for that €7, which is way too little for what is involved. If no value, or incorrect values are put on products, the clearance agent has to come up with a value. To try and make more money from an import, they would need to be really screwing the value of the product to gain an additional 2.5%.
The cost of shipping by express makes a massive difference, and won't be accepted normally as "free" shipping. People ordering don't realise this, but the exporter isn't going to get caught for it, and doesn't care.

The couriers should not deliver anything unless customer is first advised of the amount to be collected, in fact they should advise the customer before it is even cleared. Problem would be the mess created when people don't know what the import procedure is, or think they can avoid clearance, and find out what the charges are. What you would need is a system like Amazon where they advise you of the customs charges beforehand. The couriers are in a no-win situation, as no-one will want to pay to return stuff either.

If anyone is unhappy with the charges on imports, they should ask for a breakdown of the charges, and a copy of the customs entry. This should show the exact calculations used. Revenue are well aware of items being marked as gifts by far eastern sellers to avoid taxes and duties, and it Revenues job to ensure that correct charges for VAT and Duty are collected, via the couriers.