When goods are brought into a country, there are certain customs duties and taxes levied upon them by the government. The aim of this blog post is to explain the consequences of not paying your FedEx invoice and to elaborate on the reasons why they are charged in the first place. Additionally, we will also explore how taxes are classified, calculated, applied and calculated in the UK.

What Happens If I Don’t Pay Fedex Invoice?

If you don’t pay your FedEx invoice, it can either be held by the company, returned to the shipper or handed over to the government. In some cases, you will continue to be pursued by the company to clear your invoice, otherwise you might be reported for debt clearance and your credit score will be affected due to accumulated debt.

The reason why duties are levied 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 (a) the terms of the agreement between both parties who are to send and receive goods and (b) whether or not the receiver has a FedEx account as non-account holders will not be able to make a payment. In such cases, the shipment is held at the destination and not delivered to the intended recipient until duties and taxes are paid.

You can pay your FedEx invoice via any of the following methods: 

  • VISA Debit/Credit Card 
  • Mastercard Debit/Credit Card 
  • American Express Credit Card 
  • PayPal

What Are FedEx Duties And Taxes?

There are times when consumers find themselves billed for duties and taxes by FedEx 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 FedEx 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

How Are FedEx 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.

How Is A Tax Identification Number Used?

A Tax Identification Number is used to track and monitor the tax accounts of individuals. Although the term TIN Number is not specifically used in the UK in its strictest sense, the HMRC issues two TIN-like numbers to members of the public. The purpose and use of these are described below:

  • The Unique Tax Payer Reference (UTR): This is a ten-digit set of numbers issued by the HMRC to individuals and businesses who qualify for paying tax returns in the UK. You will find this number on the front page of the tax return (form SA100 or CT600). In addition to this, you will find it on a “Notice to complete Tax Return” (form SA316 or CT603) or a Statement of Account. It is also printed next to the headings of “Tax Reference”, “UTR” or “Official Use”; but the appearance and terms that are used will depend on the type of document issued. 
  • The National Insurance Number (NINO): This includes two letters which are followed by six numbers and then only one of the letters between A, B, C and D. Individuals residing in the UK will be issued a NINO once they are 16 years of age. They will be informed by the Department for Work and Pensions (DWP) or the HMRC. If you are an employee, you will find this number on your payslip as well as on a Statement of Account issued by HMRC. It links individuals to their records of national insurance contributions, tax payments, student loans as well as social security benefits.

Individuals who are under the age of 16 or do not have a right to work in the UK will not be issued a UTR or a NINO. However, individuals seeking employment or those who are eligible to claim state benefits will need these numbers for official documentation.

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 communication or trading with third parties.

What Are The Different Taxes In The UK?

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. 

Direct taxes are automatically deducted from your wages, income or pension before you receive them. This is termed as Pay As You Earn. Anyone earning equal to or less than £12,750 is not eligible for PAYE as the amount is considered under the law as an individual’s allowance. 

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 tax increases with an increase in income.

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: 

From the above-detailed discussion on FedEx invoices in specific and trading taxes in general, we have come to learn that non-payment of FedEx invoice is not a choice. If someone has agreed with a shipper to pay a certain amount, they must abide by their word. However, should someone fail to do so they must be prepared for having to face pursuance from FedEx with regards to clearance of their dues, being charged for debt clearance or even having a negative credit score.

FAQs: What Happens If I Don’t Pay Fedex Invoice?

Do I have to pay FedEx Duty and Tax invoice UK?

Unless the shipper has agreed to pay FedEx Duty and Tax, the receiver has to pay these charges in the UK. There are times when FedEx pays these in advance and bills you for reimbursement along with their service charges that are called Disbursement Fee. 

What happens if you don’t pay customs invoice?

If you don’t pay your customs invoice, your shipment can either be held by the company, returned to the shipper or handed over to the government. In some cases, you will continue to be pursued by the company to clear your invoice otherwise you might be reported for debt clearance and your credit score will be affected due to accumulated debt.

How do I pay FedEx customs duty?

You can pay your FedEx customs duty via VISA/Mastercard Debit Card, VISA/Mastercard Credit Card, American Express Credit Card or PayPal.

How do you know if you have to pay FedEx duties?

Your duties and taxes are mentioned in your invoice once you book a shipment through FedEx or receive a notification from them when someone else books a shipment to be delivered at your address. For a general overview of taxes and duties, you can visit the FedEx website for an estimate based on the nature and weight of your shipment.

Why did FedEx send me an invoice?

FedEx will send you an invoice if the terms of the agreement suggest that you will be bearing the expense of transportation and shipment of goods. This will include the cost of the goods, along with transportation expenses, as well as duties and taxes applicable in the recipient’s country of residence.

References:

Customs duties and taxes guide | FedEx United Kingdom

Why do I have to pay Duty and Tax? – FedEx | United Kingdom

How can I pay my duties and taxes? – FedEx – Frequently Asked Questions

Duties and Taxes Invoice Guide

UK Tax Calculators

HM Revenue & Customs – GOV.UK

What is a Tax Identification Number | GoCardless

Do UK companies have a TIN number?

What was missing from this post which could have made it better?

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.