Invoice Law

[jaocheu]

Hi,

 

I was sent an invoice by a company that misrepresented a fee it was charging as tax.

 

I have found many sites that describe to businesses how they are legally required to set out an invoice, but none of them mention what act or law it is forces them to do this.

 

I was wondering if anyone knew what law sets down these conditions so I can research it in a law book myself.

 

Thanks

 

Paul

[buzby]

Paul, I'm not clear what your issue is. Are you saying it added tax (VAT) to a bill that you were unaware of, or that they bumped up the bill by 17.5% to cover VAT and they're not registered with HMR&C?

[Guest express]

I don't believe there is a specific law that relates to how a business presents it's invoice. There are specifics when it comes to vat etc. but other than not, it is up to the individual company to do as they wish. Obviously the more detail they give the better, but some will just give a brief description and a total amount. I think you need to give slightly more information in order for people to offer advice relating to your query.

[jaocheu]

They charged a HMC&R administration fee. However on the invoice they clearly stated it's HMC&R not them charging this fee. Since checking I discovered it has nothing to do with HMC&R and it's the company that's charging it.

[buzby]

There's no such thing as an 'admin fee' required by the VAT authorities - is it a % of the total invoice, and if so how much. If 17.5% then all they've done is charge VAT and there's not much you can do about it, UNLESS they are not VAT Registered (did the Invoice bear a printed VAT number?).

 

If you agreed a price for the service, were you advised of any additions for VAT? As it can often sneak up if not discussed before hand.

[jampot]

The only fee I can think of is the one couriers charge to administer import duties / VAT on parcels received from abroad...

 

That's an example, certainly, of where a fee is levied.

 

However, if your invoice shows that the fee is charged on behalf of HMC&R when actually this isn't the case, that sounds a bit fraudulent...

[jaocheu]

That's the point it's fraudulent. It's pretending a fee added by the company is levied by HMC&R and hoping no-one notices. Which violates many laws.

[jampot]

If the invoice remains unpaid, I would contact the company and ask them to resubmit the invoice correctly, minus that charge.

 

When you contracted with this company, did you agree to the total cost and their T&C?

[Guest express]

Can you scan and post the invoice?

[jaocheu]

It arrived by post, sender abroad. The delivery company shoved the invoice in my face and I paid. Later I read it, phoned them and established it was their fee, not a customs charge despite what it said on the invoice.

[buzby]

Aaah! It is clear now. Yes, they are allowed to charge the fee as they provided a service. Goods that arrive from abroad - especially via Couriers - have to process the paperwork to allow the goods into the UK. Customs can levy their fees on the goods themselves, but the courier firm make a small charge for their part in the process, and VAT is added to this. If it came via the PO it would have been exempt from VAT.

[jaocheu]

But calling the small charge a fee levied by customs not them is fraud.

[buzby]

I'd need to see the statement to know exactly, but the confusion is caused by 'Customs' and 'Customs' the first concerns the act of charging for a duty (tax, if you like) which in itself is also has a VAT element. Then there's the equivalent to a tax on the services provided by the courier, these ARE amounts legally levied by the courier in respect of VAT on their service charge, which is entirely legal. They have by law to charge VAT on their service fee, it IS a legitimate tax, and they are required to charge it. If you are unlucky, FedEx, DHL and the rest will all charge a fee + VAT for processing imported goods. VAT is a charge, levied by Customs and collected by the courier, and has always worked in this way. There's no fraud.

[jaocheu]

So what you are saying is it's perfectly ok for a delivary service to deliver something to you for £190 and write on the invoice...............

 

Vat £30

Vat admin fee £20

These fees are raised by HMR&C and are no responsibility of the company.

 

 

.............. then keep the £20 for itself because it wasn't raised by HMC&R.

 

 

If there is nothing wrong with this I'm going into business.

[Guest express]

They are legally obliged to collect any duty owed, and thry have quite clearly stated that they have charged you as "ADMIN"

[buzby]

Yup. Actually, £20 is quite reasonable, as DHL charged me £28. They are allowed to charge for the services they provide (it is one of the risks of buying abroad). As to the semantics of the bill - HMR&C assessed the package of duty and VAT to be £30. The service charge for processing, collecting and remitting this (by the courier) to MHR&C was £20.

 

As for thinking it a great way to make money in business - the £20 fee would have been the same if you were importing £5000 of goods (although the VAT/Import duty would have been higher).

[meagain]

Methinks someone has missed the point here:

 

Vat £30

Vat admin fee £20

These fees are raised by HMR&C and are no responsibility of the company.

 

 

.............. then keep the £20 for itself because it wasn't raised by HMC&R.