Revenue targets growth in internet shopping

Thousands of internet shoppers have been hit with unexpected charges in a customs crackdown by the Revenue Commissioners.

Thousands of internet shoppers have been hit with unexpected charges in a customs crackdown by the Revenue Commissioners.

Last year, Revenue collected almost €2 million in customs duty and VAT on parcels delivered by An Post from outside the EU, The Irish Timeshas learned, while further amounts were collected through private courier firms such as FedEx and UPS.

Extra customs and excise staff have been stationed at sorting offices to deal with a massive growth in internet shopping, much of it using sites in the US and the Far East.

A Revenue spokesman denied that particular shopping websites were being targeted, but he agreed that customs staff had grown familiar with the most popular sites with Irish shoppers.

READ MORE

Top of the list are clothes sites, in particular companies such as Abercrombie & Fitch which have no shops in Ireland, and sites selling electronic goods.

An Post will not deliver parcels on which customs and Vat are due until these charges are paid. However, private couriers generally deliver the parcel and then send a bill for the charges afterwards.

One shopper told The Irish Times of his surprise at receiving a customs bill for €73 after Christmas, four weeks after buying clothing from a US website for €184. Another shopper said he had to pay €96 in duty on an electrical product costing €330 in the US but this was still €110 cheaper than in Ireland.

All companies charge an additional handling fee for collecting the charges on behalf of Revenue.

"In recent years, we've seen a massive increase in our packets and parcels business, and most of it is due to the internet," said an An Post spokeswoman. "As a result, Customs and Excise has increased its staffing at our main centres."

However, with An Post's main package sorting centre at Portlaoise handling over 20,000 items a day, it is probable that many packages pass through unnoticed.

Revenue officers select parcels from conveyer belts using risk profiles, and unpaid duty is only one of their concerns - of more pressing concern are parcels containing drugs, pornography, wild animals, firearms, counterfeit goods, medicines and veterinary products, or meat.

While internet shoppers are drawn to cheaper goods available overseas, the imposition of Revenue charges can significantly erode any price differential. Customs charges are calculated on the cost price plus the costs of insurance and postage. Vat is payable in addition to duty and the purchaser must also pay the handling fee.

Thus, for example, if a person buys $200 (€167) of clothing in the US and pays post and insurance of $30, he will be liable for 12 per cent customs and 21 per cent Vat on a sum of $230. If the item is declared as a gift, the customs rate falls to 3.5 per cent. In this instance, the person would pay €6.72 duty, €41.73 Vat and a €5 handling charge to An Post in addition to the purchase price.

Revenue says that "gifts" must not be valued at more than €45 and must be sent from one private person to another in order to qualify for relief.