Questions of Cash: 'DHL levied a 7.20p fee to collect 6.80p

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Q. I had to pay a £7.20 administration fee to make a VAT payment of £6.80. Am I unreasonable to think this is outrageous?

I spent £34 on a health supplement from a US website; VAT is charged at 20 per cent. I have no problem with this, but I have a big problem with DHL charging an administration fee of £7.20 to collect it from me. As far as I know, no UK domestic companies charge a separate administration fee for this. It is a cost of business. DW, London

A. Your experience highlights the risk of buying goods online from overseas retailers. While goods can seem cheaper than those from UK sources, they may be subject to additional VAT and import duties.

In this instance, you also had to deal with a handling fee imposed by DHL that was more than the VAT involved.

A spokesman for the delivery firm said: “We know that collecting VAT payments in this way can be slightly confusing. When buying goods in from overseas, you do have to pay VAT. Normally your shipper will pay this on your behalf, because there may otherwise be a long delay at customs while HMRC collects the duty, prior to clearing the goods for delivery.

”The shipper then collects the duty from you along with a small fee that covers the administrative cost of having paid the duty for you.

“A UK retailer, by contrast, is able to include VAT at the point of sale, which means no additional work is needed from the retailer and it does not have to charge any fees for recouping the duty on what you have bought. This is industry practice and DHL has the lowest fees for handling VAT payments for its customers on imported goods.

”Understandably, however, this can be frustrating for people who end up having to pay for what seems a hidden cost. Buying goods from overseas – which is increasingly easy to do – is sadly not quite as easy as buying them in the UK, and we encourage shoppers to factor VAT payments and fees into the total cost.“