Ah… it’s the last swan song of the summer and you’re scouring the web for the perfect item in the dregs of the summer sale.
Pair of sandals, a wedding present or the perfect piece of furniture. Click, ping and it’s in the virtual basket, ready to fly to you. But when your friendly postman is at the door, it won’t be delivered until you’ve paid a lot of postage, duties and delivery charges, because the value-for-money retailer is actually based in the UK.
Suddenly it’s not your ‘bargain’ anymore.
Brexit, as we know, has much to answer for and whichever contender wins the keys to No 10 Downing Street, both are committed to the outcome. While the negotiated Free Trade Agreement has paved some paths between the UK and Ireland, stumbling blocks remain and consumers who shop online will be hit the hardest. I still get messages from people who just didn’t factor in the cost of things like VAT, duty and delivery charges into their purchases, only to find out the hard way that their goods cost a lot more than they thought. So, here is the overview of this shopping cart:
VAT in Ireland ranges from 0 to 23 percent depending on the item. Although the tax office has a complete list of goods, it may not be immediately apparent what VAT is payable. It used to be that you didn’t pay VAT up to a value of €22. This limit was abolished on July 1, 2021. So if you buy something from a non-EU country that has a different VAT rate to ours (and most are lower) you will have to pay Irish VAT on it. This applies whether or not you have already paid UK VAT.
Retailers may not know or care about this. So while companies like Amazon charge the correct VAT at checkout (referred to as “Import Fees Deposit”), this is not always the case once your address is recorded. You may not know until the item is delivered and you are asked to pay. As the UK’s top VAT rate is 20 per cent and the reduced rate is just 5 per cent, there could be a bill.
Any parcel with an ‘intrinsic value’ over €150 will be subject to Irish Customs Duties. The intrinsic value is before delivery, handling and insurance costs. It applies to the delivered package as a whole, not to each individual item. But here’s the catch: while the Brexit trade deal states that goods ‘originating’ in the UK don’t bear customs duties, many consumers are caught believing they bought the item from a UK website, this covers them . It doesn’t.
For example, if you buy a gadget from a .co.uk retailer, but it turns out that the gadget was actually made in China, then you are liable for standard WTO tariffs, which also include “offset” taxes after them can draw against counterfeits.
These can really stack up and it’s a random and weird list that you’ll never find at the top (although you can visit the EU’s TARIC website if you want, which is where I found an excellent cure for insomnia).
Customs on gold is 2 pcs, costume jewelry (4 pcs), hair dryers (7 pcs), guitars (3.2 pcs), bras (6.5 pcs), and leather shoes (17 pcs)!
The country of manufacture must be listed in the customs declaration. An Post says: “An Post is obliged to collect customs duties, [we] cannot deliver your items until these charges have been paid. A team of Customs officers from the Internal Revenue Service work in An Post’s mail center and oversee the customs clearance of imported goods.” It is then their job to pay the taxes and duties directly to the Inland Revenue on your behalf.
According to MoneyGuide Ireland, Amazon’s policy states: “You will not be charged any additional fees if the actual import charges exceed our estimated import charges deposit.”
However, the final decision on customs charges on a package is made by Irish Customs Officers.
In addition to all of the above, the courier may charge a delivery fee and/or handling fee for the trouble of collecting the additional duties. This can really annoy people who think they have already paid the full amount online.
This is not an insignificant amount. A post, for example, costs up to €10 (but it could be less). Fedex and DHL vary but their minimum is around €15.
Proceeds allow the duty-free purchase of certain goods from the UK (or other ex-EU country), regardless of where they come from. It includes things like computers, phones, books, some toys, and wooden furniture, but again, the list can be random and specific, so be sure to check it out.
It becomes more difficult when you have to return items. Many shoppers love the idea of buying three or four items, maybe the same thing in different colors and sizes, and returning what they don’t like. But when you have prepaid VAT, duty and delivery charges, it is not easy to get them refunded. It is not up to the retailer to do this; The money has been transferred to the tax office, so you may need to collect it from there.
A deep dive into the cost of imports
Example 1: MoneyGuide Ireland provides an example of the additional costs of buying an item online (e.g. a microwave) from the UK that is actually made in China:
UK price including UK VAT and delivery to Ireland = £252
Base price excluding UK VAT = £200
The delivery fee of £10 (excl. VAT) brings the total value of the package to £210
Import Duty Rate = 5pcs brings the total to £220.50 whilst adding Irish VAT of 23pcs gives the final price of £271.21 (including delivery). That is before a Sterling/Euro exchange rate is applied.
Example 2: Popular clothes that, if not made in the UK, will also cost you a lot of money:
Adult sports jersey + shorts + socks (€97 + €40 + €15) = €152.00
Handling, transport and insurance €15.00
Customs value (€152 + €15) = €167.00
Customs Duty (Clothes – 12 pieces) = €20.04
VAT value (€152 + €15 + €20.04) = €187.04
VAT (23 pieces) = €43.02
Delivery fee 10 € (example)
Total cost = €240.06
That’s a €88.06 increase on the items over the retailer’s list price!
If you can buy the same thing here for less than that, even if it’s more than retail price, and you’re not sure it’s British made, you’re better off with an Irish or at least EU store.
https://www.independent.ie/business/personal-finance/dont-get-caught-by-surprise-charges-when-you-buy-goods-from-overseas-especially-britain-post-brexit-41940507.html Don’t be caught off guard by surprise fees when buying goods from overseas, especially post-Brexit Britain