Taxes that are related to the transport of goods are mainly dependent on the rates applied by the government of the country to which they are being sent. Depending on the nature and purpose of use of these goods, there may be more than one tax levied upon them and the rate may differ depending on whether they are intended for personal or business use. While the main aim of this article is to explain the consequences of not paying the DHL Import Tax, we will also discuss the reasons why duties and taxes are applied, how they are calculated and collected as well as have a general overview of the different taxes applicable in the UK.

What Happens If I Don’t Pay DHL Import Tax?

If you don’t pay DHL Import Tax, your shipment will remain in the custody of DHL and will only be delivered to you once you pay the due amount. However, they will only be able to do so for a period of three weeks. If the receiver does not pay the due amount during this time, the shipment will be sent back to the sender.

If you are an importer of goods in the UK (whether for personal or commercial consumption) you are required to buy the import tax and any other customs related duties levied by the government.

Although DHL will pay the customs duty and import VAT on your behalf while your shipment is being transferred from the country of origin to the UK, they will charge you a fee of 2.5% of the duty/tax, with a minimum charge of £11.

Therefore, if you are requesting an overseas shipment of goods for personal or business use, it will be helpful to keep the following important points in mind before you place your next order:

  • All goods that are shipped from overseas into the UK are required to be declared to UK Customs Authority.
  • Most items transported from other countries into the UK are due for Customs Duty and VAT.
  • The receiver of goods in the UK is bound to pay these duties and taxes.
  • If a gift is bought online and is sent by one individual to another, there is no tax or duty levied upon the item as long as its value is equal to or less than £39 and it is intended for personal (not commercial) use.
  • Since customs duties vary across countries, DHL can only apply them once your shipment lands in the UK.
  • Second-hand goods are also subject to VAT.
  • All goods shipped across borders are subject to VAT and a transportation fee.
  • Goods valued above £135 are also subject to customs duty.
  • Substances such as alcohol or tobacco will be subject to Excise Duty in addition to customs DUTY and VAT.

What Are Duties And Taxes?

There are times when consumers find themselves billed for duties and taxes that are in addition to the original price of the items that they have purchased or ordered. However, these duties and taxes are not applied by the company rather by their own governments. There are times when DHL pays these in advance and bills you for reimbursement along with their service charges that are called Disbursement Fee. 

Customs charges in the UK are based on the following factors:

  • Country of manufacture
  • Country-specific regulations
  • Description and end-use of product
  • Product value
  • Trade agreements (if applicable)
  • The product’s Harmonised System (HS) code

Below are details of these charges and their rate of application in the UK:

Disbursement FeeDuty and Tax
30% of the Duty & Tax amount with a minimum of 4.25 GBP0 – 42.50 GBP
A flat fee of 12.75 GBP42.50 – 510 GBP
2.5% of the Duty and Tax amountAbove 510 GBP

Why Are Duties And Taxes Applied?

The reason why duties are applied is to make sure that goods imported from other countries do not impact the sales and prices of locally produced goods and to keep competition fair. This is the reason why your FedEx invoice may include an amount that is in excess of the cost of the item(s) that you have purchased. 

It must be noted that any additional charges in excess of the cost of the shipped goods are declared by the company to the shipper who aims to send goods overseas and has the choice of bearing such charges by making a prepayment, forwarding them to the receiving party or mentioning a third party who is responsible for payment of duties and taxes. 

This choice of payment depends on the terms of the agreement between both parties who are to send and receive goods. However,, as a general rule, the receiver of goods being imported is liable to pay duties and taxes as they are being levied in their own country and will differ on a country to country basis. 

How Are Duties And Taxes Calculated?

While calculations for duties and taxes are generally complex by nature, below is a general overview.

If someone from outside the UK is shipping goods they are required to provide a commercial invoice to FedEx to declare the exact monetary value of the goods. The amount is then converted to its value in GBP, based on the foreign exchange rate at the time.

The cost of transport, insurance and any other additional costs that may apply (depending on the nature and volume of goods being shipped) are then added to the initial value of the goods. This is known as the Customs Value, which determines the Customs Duty. 

There are certain items on which additional charges such as Excise Duty, Anti-Dumping Duties and CAP (Common Agricultural Policy) may need to be applied. This will increase the Customs Value of such product(s).

At the next stage, the Value Adjustment amount; commonly known as VAT, is added to the Customs Value, resulting in the VAT value.

What Are The Different Taxes In The UK?

According to a general estimate, an individual pays one-third of their income in the form of taxes in the UK. While the amount of tax one pays depends on the scale of their income, some people will pay a higher tax perhaps due to the property that they own or inheritance that they may receive.

There are different types of taxes under the UK taxation system. Direct taxes include PAYE (Pay As You Earn) and National Insurance. These account for 20 per cent of an individual’s income. On the other hand, indirect taxes include VAT, council tax as well as duties on alcohol and petrol. 

Therefore, basic taxes in the UK include the following:

  • Income Taxes 
  • Property Taxes 
  • Capital Gains 
  • UK Inheritance Taxes 
  • Value Added Tax 

These are all progressive taxes; which means that the scale of taxes increases with an increase in income.

What Do UK Companies Use Instead Of TIN Numbers?

Since TIN Numbers are not used in the UK while conducting business with international markets UK companies provide alternates to the TIN Number. These include the Unique Taxpayer Reference (UTR) and Company registration number (CRN). Both numbers are separate and are used for different purposes by UK companies. They are extremely important for businesses and will need to be provided during regular company administration. 

The UTR is issued to registered companies by HMRC once a limited company has been registered for Corporation Tax. In addition to HMRC documents, the UTS can also be found by logging into the online Corporation Tax account of businesses.

The Company Registration Number (CRN) is a unique combination of 8 characters, which consists of either 8 numbers or depicts 2 letters that are followed by 6 numbers. It is displayed on the Certificate of Incorporation of businesses. Among the many uses of a CRN include registering with HMRC, opening a company bank account as well communicating or trading with third parties.

Who Collects Tax Revenues In The UK?

The HMRC collects and administers tax collection in the UK. HMRC administers the following central taxes while local governments collect council tax:

  • Income tax
  • Corporation tax
  • Capital gains tax
  • Inheritance tax
  • Insurance premium tax
  • Stamp, land, and petroleum revenue taxes
  • Environmental taxes
  • Climate change and aggregates levy and landfill tax
  • Value-Added Tax
  • Customs duty
  • Excise duties

Conclusion:

Through this blogpost, we have learnt that when the intended receiver of an overseas shipment fails to pay the Import Tax to DHL, they will not be able to claim possession of the goods. Since DHL would have already paid the due taxes and duties to the inbound country, they will expect a reimbursement upon delivery. However, in the other case, they will maintain custody of the shipment and that too only until three weeks. After the end of this period, they will send the shipment back to the sender if it remains unclaimed due to non-payment of duties and taxes. 

FAQs: What Happens If I Don’t Pay DHL Import Tax?

What happens if you don’t pay duty tax?

If you don’t pay duty tax, your shipment will not be delivered to you. The shipping company will hold the shipment and contact the sender. Depending on the sender’s choice to either pay the duty, forfeit the shipment to authorities or have it sent back to them (mostly at an additional cost), the shipper will take further action.

Can you refuse to pay import tax?

No, you cannot refuse import tax unless the sender of the shipment has agreed in writing to pay all duties and taxes that are to be incurred during the transport of the said shipment. If you refuse to pay import tax, the shipment will not be delivered to you unless you pay the due amount.

How do I not pay DHL duty?

If you are the intended receiver of a package/shipment, you are technically liable to pay DHL duty. Should you prefer not to, you can come to an agreement with the sender under which they bear all duties and taxes on your behalf.

Do I have to pay DHL Import duty?

Yes, if you are the intended receiver of goods being transported through DHL, you must pay DHL Import Duty as they would have already paid the amount to HMRC once your shipment arrived in the UK. Therefore, by paying DHL, you will only be reimbursing the duties paid by them on your behalf to the authorities.

What happens if you don’t clear customs?

If you don’t clear customs, your shipment will not be delivered to you. It will then be at the sender’s discretion whether they would prefer to pay duties and taxes on your behalf, abandon the items or have them shipped back.

References:

Import duties and/or VAT | DHL Express.

Shippers and receivers guide to duties and taxes

Duties and Taxes Invoice Guide

HM Revenue & Customs – GOV.UK

Tax and customs for goods sent from abroad: Tax and duty – GOV.UK

Do UK companies have a TIN number?

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