Understanding your Fedex Duty & Tax Invoice

As the UK formally left the European Union on January 1st 2021, the manner by which goods are shipped in and out of the UK has changed. The key change has been that all goods transiting through the border need to be accompanied with a Commercial Invoice, which clearly states a detailed description of what the goods are, their country of origin and their value.

Goods shipped within the EU are subject to the VAT rates of the country from which the goods were shipped and this applied to the UK prior to January 1st 2021. This has changed now that the UK is no longer part of the EU and goods being shipped into the UK are subject to UK VAT.

If the value of the goods are less than £135, the supplier must collect VAT on behalf of HMRC.

If the value of the goods are more than £135, the responsibility for collecting VAT lies with the company shipping the goods. The shipping company may choose to collect the VAT prior to delivery, at delivery or by invoice, after delivery.

Below is an example of an invoice provided to the recipient by Fedex and we would like to explain some of the key elements of this invoice. 

There are three key pieces of information on this invoice:

  1. Reference: This refers to the Reference Number on our Invoice to you. In this case, it is 5427.
  2. Disbursement Fee: This is a fee charged by Fedex for handling the collection of the VAT
  3. Original VAT: This is the value of VAT calculated by Fedex at the current UK VAT rate (20%). In this case, the VAT is £34.78 and this equates to a net value of goods of £173.90 which is the value that was declared on the Commercial Invoice created by us at the time of shipping. 

We hope that this article clearly explains the charges and why you have been charged. If you have any further queries, please contact us at orders@esmdigitalsolutions.com. If there is a dispute relating to incorrect charges being applied, please contact Fedex directly.