nick_warner-
Who trashed it is between the various couriers and the retailer - unless you engaged DHL yourself, of course.
Who paid import duty & VAT is between DHL and you
They may well accept that it is all their fault, and take it on the chin. But they may say it's still up to you to
As @housecathst states, this can't be the first time that this has happened, and there may well be a process for it, either through DHL themselves, or via various HMRC forms.
As I understand it, the VAT is payable on the value of the goods at time of sending, not receipt.
I'm only speculating, but I wouldn't be surprised if it is not as obvious as you seem to suggest.
And if you do decide to repair and sell the frame, I rather expect that there would be duty and vat payable, even if it is trashed right now.
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NotThamesWater
Why should DHL suck up £120 on your behalf? You'd probably need to claim relief from HMRC yourself.
If you don't pay £120 to DHL, I'd expect that you'd face debt collectors, followed by a claim in the country court against you (assuming DHL have already paid import duty & VAT on your behalf on the frame & postage costs).