Issue resolved. I got a response from Paypal less than an hour after submitting my query and here is what they said: "Thank you for contacting Merchant Services. My apologies for any inconveniences. Apparently, the option to override the shipping calculator has been disabled for some accounts after a system upgraded. This means that, if you had enabled PayPal's shipping calculator (and apparently you have it enabled, although with "0" values), PayPal will always use the calculator, regardless if your own website is passing their own shipping amounts. To resolve this issue please follow these steps: 1) Login to your account and click on Profile. 2) Click on "My selling preferences". 3) Click on "Update" next to "Postage calculations". (*) Direct link to this section -> https://www.paypal.com/cgi-bin/customerprofileweb?cmd=_profile-shipping 4) Make sure GBP currency is selected. 5) Click on "Clear Settings". 6) Don't do anything else, do NOT click on Save or any other button (If you do, it will set to "0" everything again). Clicking on "Clear Settings" will disable the shipping calculator, thus your own shipping charges will start applying again. This will also resolve the issue with the tax and shipping estimate box for US." Hope that helps anyone else that might be suffering the same issue.
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