Parcels being delivered from the EU are now incurring customs charges, and many UK shoppers are finding themselves out of pocket as a result.
Before January 1st, 2021, you could have ordered from a retailer in the EU and not worry about paying customs charges. Now, import duties, VAT, and handling fees are applied to orders outside the UK above £135 and need to be paid to UPS (or any other delivery service) for goods to be delivered.
This is why we have created this comprehensive guide on everything you need to know when it comes to duty and other import charges on international orders, in which we will cover:
- How has Brexit affected customs duties and taxes
- How to pay UPS customs charges
- How to return a package to a seller abroad using UPS or other delivery services.
Most importantly, we’ll show you how to reclaim customs charges on returned goods if you decide that the items don’t suit you or you’re not ready to pay the total price of the order – customs fees included.
Without further ado, let’s dive in!
How has Brexit impacted UPS customs charges?
Before Brexit, as long as the country was within the EU, VAT charges were paid upon purchasing, and import VAT was charged only on orders outside the EU. However, that has changed, and previous rules no longer apply.
Now, any goods, regardless of the country they come from, have a mandatory import VAT and customs duty charge for packages worth over £135. The import VAT rate is usually 20%, while the import duty rate depends on the value and origin of the goods.
You can get a detailed breakdown of customs charges using our Import Duty Calculator. Our simple-to-use tool will give you an estimate of what needs to be paid to HMRC based on your inputs – the type and value of the goods, their origin and the postal service in charge of delivering your parcel.
It’s messy. We know. However, tax and duty have always been a part of the import business. Most of the time, they have just been waived due to the agreement concerning free trade.
The total value of the goods will determine how much you would need to pay when they reach customs.
Excise goods also have separate customs rules, and you should be aware that alcohol and tobacco are taxed at different rates. Similar, excise duty can not be reclaimed even if you return the goods to a retailer.
What about Rules of Origin?
UPS must comply with all the UK government trading rules, including the Rules of Origin.
According to the Rules of Origin, you will not be charged import duty if the item is manufactured within the EU.
ROO applies only if the seller provides documentation confirming the goods’ origin, which would also include company info. If the document is delivered, you wouldn’t have to pay import duty, only VAT on your import goods.
So, before you click on “Buy now”, check with the retailer the origin of the goods.
How to pay UPS customs charges?
Paying for duties, fees and VAT has become relatively simple with UPS. The payments can now be made online, allowing you to receive an express or expedited delivery.
You will receive a bill from UPS through SMS or email, along with the payment link. Once you complete the payment, the UPS will be notified and start preparing the delivery of your parcel. If you choose to pay online, we recommend you save the bill to show to the courier.
A customer can also choose to pay taxes and duties in person when receiving the parcel. You will obtain a bill from the courier that contains the breakdown of duty, handling fee and VAT.
The value of the goods will determine the amount on the bill. This means that if the value of your goods exceeds £135, additional duties may be applied.
It is essential to mention that courier handling fees will be applied too. These fees will be listed on the bill you receive and must be paid at the time of delivery or before.
UPS charges a handling fee for their customs handling, as they will pay the customs fees directly to HMRC and then ask you for reimbursement. If you decide not to pay this fee, you will not receive your package. Please bear in mind that you can not avoid paying UPS customs charges if you want your parcel to be delivered.
Paying duties and fees online through UPS
There are currently three forms of online payments UPS allows, and those are:
- Electronic Funds Transfer (Debit EFT): You can arrange to have payment electronically requested and automatically debited from your bank account.
- Electronic Funds Transfer (Credit EFT): You can arrange to have payment electronically requested and automatically withdrawn from your bank account.
- Cheque: You can send cheques through the postal service with the UPS-provided remittance statement.
This allows you to pay for any fees and duties ahead of delivery. All charges should be included in the documentation you will receive.
Paying for fees and duty in person
You can pay import duties and taxes in cash upon delivery if the seller hasn’t excluded this option.
If you don’t have enough cash on you at the moment, you can pay customs charges over the phone, and the parcel will be redelivered the next day.
How to return the package using UPS?
If you wish to return your package through UPS, you would need a return label.
This is arranged by UPS Returns, allowing you several options for a return label. This should be included in the invoice you receive. However, if it’s not included, you can request it from the shipper.
Here are some return labels that can help you when making a return:
- UPS Print Return Label: Enables you to generate return labels to include with the outbound shipment.
- UPS Electronic Return Label: This allows your shipper to create and e-mail a return label to you, their customer.
- UPS Print and Mail Return Label: This enables your shipper to create and mail a return label to you through UPS My Choice.
- Authorised Returns Service: Provides you with preprinted labels for distribution.
These labels also work for Worldwide Express Freight shipments and should be included in the invoice alongside any company info that may be needed.
Please bear in mind that, even though UPS delivered your parcel, you don’t have to use UPS delivery services to ship it back. On the contrary, you can choose a more affordable option, like Royal Mail.
If Royal Mail is the delivery service of your choice, this is what you need to select on the customs declaration when sending back the items.
How to reclaim customs charges on returned goods?
After Brexit, with the newfound customs rules, many consumers hesitated about ordering anything from a business outside the UK, in most cases that included the EU.
The fear of wasting money on customs charges is common, but you can get back your hard-earned cash if something doesn’t suit. While you cannot reclaim UPS handling fees, you can refund import duty on returned goods.
All you have to do is simply return the items to the retailer. Once the seller refunds you for the goods, you go to the gov.uk website and fill out the C285 form.
However, many UK shoppers do not go through with the process of customs duty refund because it can be lengthy and complicated. Getting an accurate breakdown of customs charges from the courier documents is confusing, and you can wait up to six weeks to receive a decision.
In many cases, HM Revenue and Customs won’t notify you if your claim has been declined. And this happens quite often, as any incorrect code or piece of information will result in a claim being rejected.
This is why it became our mission to help our clients reclaim customs charges without hassle in three weeks!
Reclaim customs charges with Duty Refunds
When you buy something from a retailer outside the UK, you will be charged import VAT and duty on top of the purchase price.
This can be a huge surprise when you get a bill from a courier, as the taxes can add up to 20% or more of the purchase price.
Duty Refunds is here to help!
We’re the UK’s leading import VAT and duty refund specialist, providing an easy, efficient, and secure service that helps you get your money back. We have helped many UK customers successfully reclaim import duty and taxes on returned goods.
All we need to initiate the process on your behalf is the tracking/waybill number. Our experts will fill and file the claim, and you can sit back and relax. You can always check the status of your claim through your account on our website.
In three weeks, the money will be in your bank account!
Final thoughts
We understand that customs rules can be quite confusing, frustrating, and overwhelming. We hope that this guide gives you a better understanding of customs rules and fees and that you will be more comfortable purchasing outside the UK.
If you are dissatisfied with your order or imposed customs fees, you can return the items and ask for a refund of import duty.
While you cannot refund the UPS handling fee, you can get a refund of customs charges if you return the goods. If you don’t want to go through the process alone (which we understand), you can initiate your claim with Duty Refunds in just a few clicks!
Our experts will take care of everything and get you your money back in three weeks! Enjoy shopping, and let us know how we can help further!