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