Because of Brexit, UK shoppers will now have to pay import taxes and handling or courier fees on all international orders above £135. But in case you return those items abroad, you could be eligible for a refund of customs charges.
To claim a refund, you need to submit some courier documents. In this article, we’ll share everything you need to know about reclaiming customs charges after FedEx delivery.
What are FedEx customs fees?
Even though FedEx will message you about paying customs charges, it’s HMRC that collects these fees.
If your order exceeds £135, you will be charged customs duty, import VAT, and handling fee.
Customs duty is a tax on goods imported into the UK worth over £135. Its rate depends on the value, type, and origin of goods you’re importing.
Because of the Zero-Tariff Agreement between the UK and the EU, the customs duty rate is 0% for goods imported from EU countries. If goods are ordered from EU retailers but manufactured overseas, the preferential duty rate does not apply.
Import value-added tax or import VAT is a tax charged on goods imported into the UK from another country. Usually, import VAT is charged at 20% of the total cost, including the value of goods, shipping costs, insurance, and any payable duty.
There is also excise duty. This is a duty that is imposed on harmful goods like alcohol or tobacco. Excise goods are taxed at higher rates to reduce orders to a minimum. Even if you return these items abroad, you can’t get a refund of excise duty.
Couriers will handle the customs on your behalf and charge a courier or handling fee for their service. After your parcel is released from customs, FedEx will send you the payment instructions. You will also find a Duty & Tax Invoice, which you must settle to get the parcel.
FedEx handling fee may go for £12.5 or 2.5% of duty and VAT (value-added tax) combined. The cost depends on which amount is higher.
How to pay duties and taxes via a FedEx account?
First, you can contact their Customer Service and set up a direct debit with FedEx. Though, we advise you to check their working hours before calling.
If you want to pay via your credit or debit card, you can go about it in three different ways. You can link your card to your FedEx account name. You could also pay FedEx customs online using their service FedEx® Billing Online. Or simply contact them and pay over the phone.
If you choose the third option, just ensure your invoice number is ready. The number is in the top right corner of your duty and tax invoice, below the bank details, as shown below.
Lastly, you can also pay FedEx customs online through an electronic bank transfer. Best contact their Customer Services to get the necessary information like account name, account number, etc.
Why was I charged so much for FedEx import duty and tax invoice?
Typically, FedEx will send you an invoice with the estimated cost of duties and taxes in advance. However, this isn’t always possible. Because of a restricted time frame and the sheer quantity of international shipping, FedEx cannot contact every new customer in advance.
Once more, as the HMRC is the final decision-maker on all import duties and taxes, sometimes FedEx is unaware of the exact amount that needs to be settled until the time of import.
In case the seller paid all shipping charges to FedEx related to your parcel, you might still have to pay duties and taxes after delivery. What happens is that the shipper paid for transportation charges and not import duty and tax.
The courier company can often send you an estimated value of duties and taxes calculated before international shipment. Or in some cases, you can even calculate customs charges on their website. However, the final say in the matter has the HMRC. After being assessed by the HMRC, there may be a difference between the initial estimated values and the final sum you will have to pay.
If you want to check your import charges in advance, you can use our customs tax calculator. Just enter the basic information about your order, and you’ll get an estimate of customs charges in just a few seconds.
Other ways you might be charged duties and taxes
It’s good to know that you will need to pay customs charges for the gifts from abroad. So, if FedEx delivers you a gift from outside the UK, this is what you should know:
- If the gift’s value is less than £39, you won’t be charged import duty and tax. However, if the gift’s value is between £39 to £135, you will need to pay the import VAT. If its value exceeds £135, you must pay both import VAT and customs duty. You will be charged excise duty if the gift contains alcohol or tobacco.
- The sender must be a private individual.
- The package must be sent to a private address.
- When filling out FedEx’s documents and the commercial invoice, you must mark it as a “gift.”
- All items in the parcel must be listed with a description and value.
According to the FedEx Express website, when it comes to samples, you won’t have to pay if:
- The items in the shipment will only be used as samples.
- They are of negligible value.
- They have noticeable damage.
- The purpose of the shipment is to be used to obtain orders for the represented goods.
Remember that you or your shipper must declare in the provided paperwork that the order contains samples.
What happens when you don’t pay duty and tax to FedEx?
Technically, you can refuse to pay the duties and taxes. Though, we don’t recommend doing this.
If you don’t want to pay, the parcel will be considered rejected goods, and you will not receive the shipment. This must comply with strict HMRC rules, like:
- The items in the shipment are defective or damaged during shipping.
- They do not adhere to the supplier’s terms and conditions.
However, you will still need to pay duties and taxes to FedEx, they’ve settled in your name. Not only that, but you need to then file the claim directly to HMRC yourself. The claim needs to be made:
- Before the items are returned or destroyed.
- Within 12 months of the original entry of the shipment to the authorities.
Otherwise, you won’t be eligible for a refund.
Instead of rejecting the parcel, it’s better to accept it and pay the required duties and taxes. Now, you can return items abroad and request a refund.
Once you return your goods, you can apply for a refund of import charges.
How to Apply for a FedEx Customs Refund
You might have paid FedEx customs fees, but that money is with HMRC, and they can issue you a refund of customs charges. Even though the FedEx handling fee is non-refundable, you can still apply for a refund of import duty and VAT on returned goods.
Now the first step is to return the parcel. For that, you will need to re-package your order in its original packaging or any other suitable one.
Once you’ve securely sealed it and removed old tags and labels, you need to attach a return label. You can find the label inside the original shipment or on the company’s website. Just make sure to follow the instructions and fill everything out correctly.
When you’re finished with this step, call their Customer Service or fill out their online form via your FedEx account. You can also drop it at the nearest convenient location for you.
Important to note is that you do not need to use FedEx to return your package. You can use any other courier company.
How to return your parcel
When returning a parcel, you must fill out a customs declaration or CN22 form. Here you will need to check that the items are returned goods.
When you return and refund your order, contact your courier and ask them to send you the import paperwork:
- entry advice,
- itemised taxes,
- and shipping invoice.
Make sure you have your Tracking ID ready.
Other than that, you will need to contact your seller to get return confirmation. This document is proof that you’ve returned the parcel and got your refund. You will also need a pro forma invoice from the seller stating why you are returning the shipment.
And finally, you will fill out the HMRC customs form. You can find the C285 form on the gov.uk.website.
In the form, you will need to fill out personal details and details about the shipment, invoice number, courier company, payment, etc. You also have to state the reason you are applying for a refund of import duties and taxes. Please ensure that the information you’ve provided is valid.
Once you’ve completed and gathered all the documents, you will need to print them out and post them to HMRC.
Now sit back, and be ready to wait. It could take weeks to get a response from HMRC. And if you made only the slightest mistake in the process, it won’t be a positive response.
How can Duty Refunds help?
Luckily, you can get your money back through a representative. This is where we come in!
Duty Refunds is an online service that helps UK customers get duty and tax refunds on returned goods. And yes, this includes cases when FedEx delivers your parcel!
To start the process with us, fill out our online form. Just enter some basic information about your order and a tracking number so that we check if you’re still eligible for a refund. Once we confirm your eligibility, we will start preparing your claim.
As a next step, we will ask you to upload FedEx courier documents. If you don’t have them, it’s not a problem. We liaise with major courier companies to gather all the paperwork we need to submit the claim.
The process takes us as little as three to six weeks, and you don’t have to do anything! As soon as HMRC approves your claim, we will transfer the refund to your bank account.
For processing your claim, we charge a 15% commission fee on the refund amount; but only after we get your money back. We have a “No win, no fee” policy!
Final thoughts
We hope this article has answered all of your questions about paying FedEx customs charges and reclaiming them on returned items.
If you want to save time on your next international return, claim an import duty refund with us. We’ll take care of everything for you and get you your money back in three to six weeks!