How to agree a temporary surcharge expiry
Agree the surcharge in writing against named products, orders and quantities, with a separate base price and a clear expiry trigger. Set an end date even if you also schedule a review, require evidence and written approval for any extension, and instruct accounts to remove expired charges. Discuss these terms with Cambridge China Bridge.
Record the temporary change separately
Ask the UK sourcing seller to record the reason, surcharge amount, calculation basis and unchanged base price in a written amendment linked to the accepted quotation and purchase order. Specify whether the surcharge applies per unit, per shipment or to a named cost item. Avoid replacing the base price with a combined price that hides the temporary element.
Before agreeing the amendment, check how the existing terms deal with price changes and approval. Use assessing contract price increases for that question and checking seller terms for the wider terms review.
Define exactly which quantities are affected
List the product codes, purchase orders, batches and affected quantities. Separate goods already ordered from future orders, and identify any quantities excluded because their materials or freight were already secured. For partial coverage, ask for an allocation schedule showing which units carry the surcharge.
Choose the event that determines eligibility, such as order acceptance, production release or dispatch. Explain how split deliveries, delayed production and outstanding balances will be treated. A later invoice date should not decide eligibility unless you expressly agree that basis.
Set an expiry as well as a review
A review date can leave the outcome undecided. Agree an end date or a defined quantity limit, and say which takes precedence if both apply. Specify the last eligible event and how remaining affected units will be identified. If you want the charge to stop automatically without an approved extension, write that into the amendment.
Suggested wording to complete together: “The surcharge applies only to the products, orders and quantities in the attached schedule. It ends at the agreed expiry trigger. A review does not extend it. Any extension requires written approval identifying the revised charge, affected quantities and new expiry. Subsequent eligible purchases return to the recorded base price.”
Require evidence before an extension
Agree what the seller must supply before the review: dated factory cost evidence, a freight quotation or another record matching the stated reason. Ask for a comparison with the original basis, the cost still affected, and the calculation allocating that cost to your remaining quantities. Allow commercially sensitive details to be redacted while keeping the calculation checkable.
Confirm who can approve an extension and when the evidence must arrive. Record the decision even if the surcharge is reduced or ends early. Reject open-ended wording such as “until costs normalise”; agree a fresh expiry and scope instead. Ask whether lower costs should reduce the charge before expiry.
Close the surcharge in the invoice records
Give purchasing and accounts the same amendment and affected-quantity schedule. Ask the seller to show the base price and temporary surcharge separately while it applies, then remove the charge from subsequent invoices outside its scope. Reconcile split invoices against the schedule so the same cost is not recovered again. See purchase orders and invoices for the document roles.
Check the next invoice and any outstanding balance invoice against the expiry trigger. If the charge remains, identify the disputed line and ask for a corrected invoice or an agreed credit and refund or account adjustment. Keep that correction separate from a newly negotiated price reduction. HMRC says to record a VAT error for correction as soon as you find it; pass any VAT issue to your accountant.
Frequently asked questions
Is a surcharge review date enough?
A review date leaves the outcome open. Agree an expiry trigger and specify whether the charge stops without a written extension.
Can a temporary surcharge apply to existing orders?
Identify existing orders separately and record exactly which quantities you agree to include. Check the accepted terms before approving a change.
What evidence should support a surcharge extension?
Ask for dated evidence matching the original reason, a comparison with the original cost basis and a calculation for the affected quantities. Agree the revised scope and expiry in writing.
What if the surcharge appears after expiry?
Send the seller the amendment and identify the affected invoice line. Request a correction or agreed credit, then check the account adjustment and later invoices.