Commercial invoice mistakes

The errors customs actually queries, what each one costs you, and how to correct one once it's filed.

Most held shipments come down to an invoice that doesn't say what the goods are, or a price that doesn't look like the sale. Each error below costs one of three things: a delay while customs asks, a wrong duty bill, or a compliance record you'd rather not have.

The mistakes, and what they lead to

The mistakes, and what they lead to
Vague description: "parts", "gifts", "samples"Rejected as a term, query or physical examSay what, what of, and what for
Value written down to reduce dutyUndervaluation. Duty, interest and penalty, and a flag on the importerUse the price actually paid
"No commercial value" on a sampleCustoms values it anyway, and the entry is wrongState a market value
Discount that isn't shownDeclared price doesn't match the paymentShow list price, discount and net
Freight and insurance rolled into one priceYou pay duty on freight in FOB markets, or understate it in CIF onesItemise them
One origin for a mixed shipmentWrong additional duties or markingShow origin per line
Missing or wrong IncotermsCustoms can't tell what the price includesRule, place and year
Currency isn't statedConversion at the wrong amountName the ISO code on every total
Invoice and waybill disagree on weight or countA hold while it's reconciledFill all documents from one record
Assists left outUndervaluation, often found years laterAdd them to the value
Buyer's address used as importer when it isn'tWrong party billed, or a refused deliveryName the importer and agree it first

A missing charge, worked through

This is our own illustration. An importer in the UK buys 1,000 phone cases at GBP 3.00 each, and gives the factory the mould for free. The mould cost GBP 2,000 and it's used only for this run. Assume a 4% duty, with GBP 600 of freight in the value.

A missing charge, worked through
LineAs filedCorrected
Goods3,000.003,000.00
Mould (assist)0.002,000.00
Freight to the UK600.00600.00
Customs value3,600.005,600.00
Duty at 4%144.00224.00
VAT at 20% on value plus duty748.801,164.80

The duty underpaid is GBP 80, and the VAT is GBP 416 out as well. HMRC's guidance is clear that tools and moulds are additions to the price. The US invoice rule asks for assists by name, including dies, moulds, tools and engineering work. If the mould is used across several runs, you'd apportion its cost rather than load it on one. Now multiply by a few years of shipments, which is the way an audit will do it.

Under-declaring for a customer is the expensive favour

A buyer may ask you to write a lower value to cut their duty. Don't. On a commercial sale, value starts from the price actually paid or payable, and an auditor can set your invoice against the buyer's payment. You'd have issued a false document, and the favour leaves both of you exposed.

Fixing a mistake after filing

The route depends on where you are:

As practical advice, tell customs before they find it. A disclosed error generally goes better than a discovered one, and the US has a formal prior disclosure route. Then fix the source: if a template or a product field caused it, that same mistake is on every other shipment.

Check these before you send

  1. Unit price x quantity equals line total, and lines add up to the total.
  2. Currency is on the totals.
  3. Every line has a real description, a code and an origin.
  4. Freight, insurance and discount are separate lines.
  5. The Incoterms rule and place are present.
  6. Weights and carton counts match the waybill or bill of lading.

The proforma invoice generator lays these fields out, so you can check before anything ships.

Sources