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,
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December 10th, 2011 - 11:12
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..
January 13th, 2012 - 21:04
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?
January 13th, 2012 - 21:16
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.
January 19th, 2012 - 23:32
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.
January 20th, 2012 - 09:16
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
January 26th, 2012 - 21:40
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
January 27th, 2012 - 20:17
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
February 28th, 2012 - 13:08
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
March 1st, 2012 - 09:18
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
February 29th, 2012 - 19:41
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
March 22nd, 2012 - 22:51
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.
March 23rd, 2012 - 09:59
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
October 4th, 2012 - 20:46
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
October 5th, 2012 - 09:54
Hi Woo,
glad to have been of some help. Would you mind doing me a big favour and tweeting this post out?
Cheers,
Karl
October 9th, 2012 - 17:55
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.
October 10th, 2012 - 09:33
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
October 20th, 2012 - 20:48
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.
October 22nd, 2012 - 10:13
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
November 11th, 2012 - 12:44
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
November 12th, 2012 - 09:20
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
December 29th, 2012 - 21:36
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.
December 29th, 2012 - 22:01
Hi Stephy,
they can charge VAT on shipping, in fact they’re legally obliged to (since their turnover is above the VAT threshold).
So, sadly no avoiding that one.
Cheers,
Karl
January 17th, 2013 - 18:18
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?!
January 18th, 2013 - 09:09
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
January 24th, 2013 - 08:07
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?
January 24th, 2013 - 09:12
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
February 6th, 2013 - 08:30
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
February 6th, 2013 - 09:33
Hi Will,
Thanks for keeping us all posted and I’m so glad it worked out for you. Just goes to show that FedEx really doesn’t have much of a leg to stand on.
Cheers,
Karl
March 1st, 2013 - 01:33
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.
March 1st, 2013 - 10:25
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
March 29th, 2013 - 19:24
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
March 30th, 2013 - 15:27
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.
May 1st, 2013 - 22:06
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
May 1st, 2013 - 22:44
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.
May 3rd, 2013 - 21:35
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
May 3rd, 2013 - 21:39
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.
May 15th, 2013 - 14:10
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