July 20, 2016 by Andrew Minalto - 16 Comments

Shipment Arrived WITHOUT Customs Clearance! What to do?!

customs-declaration

I regularly receive emails & blog comments from people who have imported something from China – shipments that should have been declared through customs so that import duty and VAT are paid – but they arrive without any such charges.

This usually happens because Chinese suppliers UNDER-DECLARE the value of the goods sent to you. E.g. you bought something for £200 but the supplier marks the package as a GIFT and puts $20 as the value, which by law means there are no taxes to be paid.

For personal use this doesn’t create much problems BUT if you’re a business owner or sole trader, this is a big issue as you can’t properly book the transaction as you haven’t paid any taxes. And even if you do, if you get an audit from HMRC they will quickly find out that you haven’t paid taxes on these purchases which could lead to penalties.

If your goods are delivered via sea freight or air freight, then there usually won’t be any problems as the shipping company will by default process your shipment through customs.

Problems usually occur with courier companies and Royal Mail (airmail deliveries).

First, I will give some advice on what to do to PREVENT situations like these from happening:

1) Always, always ask your supplier to attach the REAL invoice with the REAL value listed on the outside of the package and to fill in any attached customs forms properly. In many cases this will help but it’s still quite common for Chinese suppliers to under-declare your shipment, even if you’ve asked them not to.

2) If your goods are being sent via courier (DHL, FedEx, UPS etc.) then once it’s been dispatched and you have the tracking information to hand, you should call the courier and inform them that this shipment requires customs clearance. They’ll usually give you the contact details for their customs department, who you can send the invoice and proof of payment to. This way, once the shipment arrives in the UK they’re already prepared and ready to do the proper customs clearance.

Now, let’s cover situations when you receive your goods without paying any taxes:

1) If the package was delivered by a courier, chances are that you will still receive an invoice for VAT & import duty as some courier companies don’t ask for up-front payment but instead send a tax invoice to you a few weeks later, via email. But it could also be the case that your goods were not declared. So what to do?

Simply call the courier company responsible for your delivery and ask them whether the shipment was cleared through customs and if an invoice is on its way to you.

If that’s not the case, inform them that you need to declare this shipment and they will let you know the next steps to take.

2) On the other hand, if your package is delivered by Royal Mail without you paying any taxes then you know for sure that it slipped through customs. As with Royal Mail you’re required to pay any taxes due BEFORE you receive your shipment. This can be done online:

http://www.royalmail.com/customs/receiving-mail-outside-the-european-union

So if you don’t get charged by Royal Mail, it means that your goods weren’t cleared through customs… So at that point you need to fix this, which you can do by filling in a special form called BOR286 – used when you believe import duty/VAT was wrongly charged on an item you imported by post.

You can find and download this form here:

https://www.gov.uk/government/publications/vat-customs-dutyimport-vat-relating-to-imports-by-post-bor286

Lastly, don’t be surprised to see an extra processing charge on these tax invoices! Each courier company has a slightly different fee for customs clearance but it’s usually around £10-£20. Royal Mail’s fee is £8, which is the cheapest I’ve seen.

So make sure you take this fee into account when calculating the tax on goods you import for re-sale. For very small/first-time orders this fee can actually make a significant change to your projected landed cost and therefore your potential profit!

Thanks,
Andrew

16 Comments
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  1. Hi Andrew,
    I have just received a shipment from China via FedEx with the correct value etc. on for declaration purposes. I am unclear whether I will automatically receive an invoice to cover duty etc. or do I need to generate an EORI form from the .gov website?

    Can you help?

    1. Andrew Minalto

      Hi Andrew,

      If courier did not ask for EORI number, you don’t need it.

      But to be sure that your shipment was properly declared at Customs, call Fedex and ask them about it – whatever you have to pay VAT and import duty or not.

      Thanks,
      Andrew

  2. i bought 2 action cameras sepratly in 2 different parcels but they both are one after other. I bought them for $40 each. It comming via singapore post. Will there be customs duty. What will be the charges?

    1. Andrew Minalto

      Probably there won’t be any extra charges, no.

      Andrew

  3. I have bought swimwear off amazon and paid less than £10, the value is a lot higher than this , will I have to pay import tax. It has been dispatched from USA via China Post to me in the UK.

    1. Andrew Minalto

      Most likely no, you won’t have to pay anything.

      if it was sent via China Post, it will come from the China, not the USA.

      Thanks,
      Andrew

  4. Charlie Clifford

    Hi Andrew

    After a lot of reading you entire blog, and all comments.

    The Answer I think – is as an Importer you have a responsibility to pay all VAT and Duty!

    FULL STOP! No questions here!

    on all values over £15, clearly Border Agency is overwhelmed and not catching these import, via China Post or whatever.

    It’s then a grey area, if you place 1 order of 50, or 10 orders of 5, to keep the cost below £15!

    but then the same applies, of businesses which “fudge turnover” to stay below the VAT threshold, because then they are 20% more expensive, to non-registered job public on stupid street!

    I think I have my answers!

    Not sure though how BA/HMRC, know or how they are going to catch up with all these non-VAT, non-DUTY payers in the UK, which are staving the UK of TAX (Money!)

    1. Andrew Minalto

      Yes, that’s all correct Charlie.

  5. Charlie Clifford

    Hi Andrew

    Been reading this topic area with great interest with the number of Sellers on eBay and Amazon, re-selling stuff purchased from Alliexpress, and I’m sure HMRC are missing a huge amount of money, which is not being picked up on items arriving via Royal Mail in the UK – under staffed ? or hoping businesss will do the right thing, and cough-up the VAT!

    You state fill in form BOR286 – this form states – Customs Duty or import VAT has been incorrectly calculated on your imported item.

    Does this APPLY to NO Customs Duty or Import Duty has been calculated, e.g. ZERO, because you have no Reference Number to fill in or Label to apply.

    How would you then calculate what you owe, because, you could make up any figure, and state its below £15? So owe nothing?

    and if all the items you import are under £15, rather than a large box of items, get it split to under £15, is that going to avoid VAT and DUTY (subject to item)

    I know a local business reselling on eBay/Amazon purchasing from Aliexpress, receive many shipments a week, via Royal Mail, (because 50 arrived here one day, because my neighbour was out!) and NONE have been subject to VAT/Duty, and the values have been clearly marked, and it makes me wonder why Border Agency is missing these items ?

    (I received a damn T-shirt gift from the US, in a competition, and had to pay $35!, VAT and Handling Fee!) – why is US shipments so hot, and China shipments get through!

    So, this local Business should be paying 20% to HMRC ? and maybe duty as well ?

    BUT how, if it’s not caught by the Border Agency in the first place, is it not there job to police this and apply the charges, or is this a case of Ignorance is no Defence?

    and some of the parcels I inspected were declared of correct values, well more than £15, which I believe is the no VAT, so this business would need to pay many hundreds or thousands of VAT ?

    thanks, I’ll wait a reply, before I burst his bubble…..but I think I get the picture, there’s no free ride, when it comes to HMRC!

    Charlie

    1. Andrew Minalto

      Hi Charlie,

      Thanks for your comment.

      I won’t be able to answer to all of your questions but yes, that form should be used when you haven’t been taxed at all on your imports.

      This form is used to VOLUNTARY inform HMRC and pay VAT and import duty – so why would you under-declare value of goods there?

      Business owners need to do this as otherwise they can’t do proper books. Individuals will probably never do it as they’re just lucky that they didn’t get charged, that’s it.

      Reason why so many packages gets through Customs without charges? Don’t ask me Charlie, lol, I’m not working there.

      Thanks,
      Andrew

  6. Hi Andrew,

    I just wanted to say thank you, this site is a wealth of information, and has helped me to correctly calculate the landed costs of my imports, and in one instance even saving me money, by showing that a UK distributor was cheaper for one item, however rare that may be.

    Thanks 🙂

    1. Andrew Minalto

      Great to hear that Daniel! 🙂

      Andrew

  7. Hi Andrew,

    Just a quick question. Opened my business in October 2015. On my first shipment from China they under-valued my goods so I have paid less Tax and VAT on it. On all orders since I have been very clear to correctly declare the value of goods and all suppliers have done so.

    What should I do about that first order that I have not paid enough VAT and Tax on? I am a limited company that is not VAT registered.

    Thanks
    Jake

    1. Andrew Minalto

      Hi Jake,

      Not sure really what you can do as it was long time ago…

      Probably you should contact HMRC and ask them for advice on how to deal with this situation now.

      Andrew

  8. I have got a parcel in value of £1360 shipped to my door by DHL from USA. I found a Tax invoice inside the parcel with DHL logo asking to pay £334 to HMRC.
    I wonder whether DHL has paid this behalf of me and now asking for it or ……

    It is not clear to me. Would you advise me please?

    1. Andrew Minalto

      Hi Jay,

      That amount sounds about right and you just have to pay those taxes as per that invoice.

      To be 100% sure it’s legit you can of course call DHL and confirm.

      Thanks,
      Andrew

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