When is something free not really free? When it comes from the UK and has perhaps not been properly labelled. “I ordered a free sample of material from a company in the UK,” begins a mail from Elaine – a mail which could well have implications for many people shopping online in the run-up to Christmas.
“Before it arrived, I got a bill from a delivery company for €13.64. There was an import tax of €7.64 and a disbursement fee of €5. I didn’t pay it, thinking that the sample wouldn’t be delivered then and would be sent back.”
While that might have been a logical assumption, it was also quite wrong. “The package was delivered and I kept getting letters telling me to pay the charge,” she says. “There was no phone number or email address for me to contact them, just a link to pay the charge. They threatened to pass me on to debt collectors, which they have now done. The bill is now over €18. They say they will add €20 on for every letter they send. This does not seem fair to me.”
It is, indeed, very unfair although we are not sure where exactly we can point the finger of blame. Obviously, were it not for Brexit, this would never have happened. In times past, when the UK was in the EU, a package such as this would have come from there to here without customs officials showing the slightest interest in it, but then there was all the Brexit unpleasantness, which meant the UK was suddenly regarded by us as a so-called third country, with all products bought from there liable to the same rules and taxes as if they had come from Taiwan, Texas or Tanzania.
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In this instance, there may also be fault on the part of the retailer who shipped the free sample. While we know it was a free sample. we don’t know what value it had or what the retailer had put on the label and if they had made it clear that it was a sample for promotional purposes and was of a negligible value.
Had the correct paperwork been completed in the UK, then the sample would most likely have been exempt from tax. But if they just sent it or ascribed a particular value to it then it would have been taxed accordingly as a product coming from the UK.
And then there is the delivery company. It had to complete customs declarations and outline where the product had come from and what it was and it may well have overstated the value, leaving our reader with an entirely disproportionate tax bill to pay.
Where the price advertised seems attractively low, this might be because tax and duty costs are not reflected in the price advertised
We understand why Elaine might have assumed that by ignoring the request for payment in advance of delivery the package would be sent back to the retailer in the UK. But that is often not what happens, not least because it gives more work to the delivery companies in an era when they are all suddenly swamped with extra work because of Brexit. So, oftentimes, the simplest thing to do is deliver the package and then chase the recipient for the money.
We contacted Revenue about Elaine’s case and a spokeswoman was upbeat about her prospects of seeking redress.
Customs declaration
“There isn’t enough information to be definitive on exactly what has occurred in this case but it appears that the electronic customs declaration completed by the parcel service has not identified the goods as samples for trade promotion purposes,” she said. “If goods are not declared properly in the customs declaration, Customs and VAT charges may be levied where they would not otherwise arise if the goods were correctly declared.”
She added that “in the normal course of events, samples of goods for trade promotion purposes can be imported from outside of the EU without the payment of customs duty and VAT. For this exemption to apply, the goods must be used as samples to promote future sales and must be of negligible value. The courier or postal service handling the package should correctly complete a customs declaration by declaring the goods as samples for trade-promotion purposes, and enter a specific code to confirm the goods as such. It would appear that your reader has a valid case with which to approach her parcel service operator.”
We are now in the process of chasing the parcel service operator in question to see what we can do for Elaine.
Her story raises an issue that will be encountered by many Irish shoppers in the weeks ahead, particularly those who are shopping on UK-based websites. This has prompted Revenue to remind people to check whether the advertised price of online goods includes all tax and duty costs due before deciding to buy.
Where the price advertised seems attractively low, this might be because tax and duty costs are not reflected in the price advertised and there are additional charges, it warned.
Real cost
“Almost all goods bought online arriving from non-EU countries will be liable to tax and duty,” says Revenue’s Maureen Dalton. “You need to check whether the advertised price includes any tax and duty costs. Knowing the real cost of a product from the outset will better inform your decision to buy the goods and will ensure there are no surprise additional tax and duty costs when the goods actually arrive in Ireland.”
She highlights different models operated by different retailers in the UK. “In the case of some suppliers, a duty-paid model is in operation, whereby the total advertised price for the goods at the time of purchase includes Irish VAT and duties, meaning no further such charges will arise on delivery.
“However, where this is not the case, the amount of VAT and any duties due will be payable when the goods arrive in Ireland. Online shoppers should also be aware that, separate to import taxes and duties, it is normal practice for parcel operators to also charge an administration fee, the amount of which can vary across operators. You will have to pay all of these additional charges to the postal service or parcel operator before the goods will be delivered to you.”
It is worth noting that VAT rules have changed in recent years and VAT is payable on all goods arriving in Ireland from non-EU countries, no matter how much they cost. So were you to buy a Christmas jumper online for €20 from a non-EU country, VAT at 23 per cent will apply to the cost plus the parcel operator’s administration fee for bringing the goods to Ireland. That would make a Christmas jumper you thought cost €20 end up costing €28.90, when a €3.50 administration fee plus €5.40 in VAT is imposed.
Online shoppers should be aware that a ‘.ie’ domain name does not necessarily mean a website you’re buying from is based in Ireland
And if the purchase price of the goods alone is more than €150, you will have to pay customs duty and VAT. So if you bought a coat from the UK that had a price tag of €250, when VAT, duty and the administration fee are included to the price, it could end up costing you more than €350, a jump in price which may well give you reason to pause.
It might also influence your decision on where you buy and prompt you to shop local, which is, of course, a good thing. It is also worth remembering that online shoppers should be aware that a “.ie’” domain name does not necessarily mean a website you’re buying from is based in Ireland. There is nothing to stop Dan’s Dodgy Deals in Denver setting up a dansdeals.ie website but, despite the website address, you will still have to pay all the necessary taxes if Dan ships to you from his home state in the US.
Shoppers can check where a business is based by reading through the About, Contact us and Terms and Conditions sections of the website of the business concerned. It might sound like a chore, but a couple of minutes research now might save you some awful headaches in the future.
Offline issues
Ann O’Neill got in touch last week to highlight two things. The way people who don’t have access to the internet can be disadvantaged, this time when it comes to buying home heating oil and the benefit of standing your ground.
“I know from past experience that the larger amount you buy, the better price you get, so I always try to wait until I need 1,000 litres,” she says.
“However, my gauge is broken so it’s always touch and go. Last time, the delivery man said just ring in and ask for a fill so I did that on Wednesday. I also asked for the best price possible and this was agreed. I got my delivery today and it took 1000 litres for which I was charged €1,239.99. I looked up the price on the site and the price for 1,000 litres was €1,199.00. I rang the company and was told that this is an internet-only price. I could not find any mention of that on the site. I argued this and they said they would reduce it to €1,225. I declined this also and eventually they gave it to me for €1,199. The difference of €40 means a lot to me. So once again anyone without internet is at a disadvantage.”
Rising price of Eir
Shay Dempsey contacted us in connection with a pricing policy imposed by some mobile and broadband operators which, he points out, could lead to “whopping increases” next year.
“I have a broadband, TV and home package with Eir. I got a price increase notification during the summer which I found somewhat worrying. What I find most concerning (and arrogant) is how they have awarded themselves annual increases of the CPI plus 3 per cent from April next. Would that all of us who are trying to get to grips with the current cost-of-living crisis would be able to follow suit. With inflation running close to 10 per cent at the moment, Eir customers are looking at a whopping increase next April.”
He says it is the “most arrogant and presumptive price-increase notification I have ever received and that is saying something. I thought I should bring it to your attention. Needless to say, I intend to shop around for better value and less arrogance.”
According to the company website, the new pricing structure is being rolled out next April “in order to support our continued investment in our products and services”.
It says “the monthly price of your Eir plan will increase in April each year” and “will be based on the annual Consumer Price Index (CPI) published in the previous January, plus an additional 3 per cent [and] applies to all new and renewed contracts entered into from May 12th, 2022”.
In the admittedly unlikely event that inflation is zero or in minus territory “the additional 3 per cent increase will still apply”.
So, what will all that mean? Well, if you pay €50 a month right now and inflation in January is in line with what it was last month you will face a price hike of 12 per cent in April, which would mean your monthly bill rising to €56. And if we assume that inflation stays at that level for a further 12 months – and let’s hope it doesn’t – your monthly Eir bill in April 2024 will rise to €62.72, which when spread out over the cost of a year comes to a leap of more than €150.
It is also very unusual for a company to signal price hikes that are likely to kick in months – and indeed years – into the future.
Mind you, Eir is not alone. This summer, Vodafone announced that it, too, would be increasing its prices annually by at least 3 per cent and would also be looking at the CPI figures in January when determining increases, while Three Mobile said its customers can expect annual price hikes of 4.5 per cent.
We contacted the Competition and Consumer Protection Commission to see if it had a view on the similar price hikes among the main communications providers but it had not responded by time of publication.
Tolls take toll
A reader called Ronan had a recent back and forth with eFlow, the company that operates the M50 tolls, which he says “highlighted the shocking amount of charges and penalties they charge consumers who forget to pay their toll within 24 hours”.
Ronan recently changed his car and hadn’t registered for a new toll account. “I made six journeys through the M50 toll (€3.20 times six which equals €19.20) over around five weeks, and when I rang eFlow they told me that I had racked up penalties and that my balance was over €300. I was shocked and asked how this was possible and, after a few more transfers, I spoke to a supervisor who said they’d reduce the charge to around €120. However the scale of penalties versus the toll charges are completely out of line. It could be one worth highlighting in your column. People complain about charges on credit cards etc and very high APRs, but these are on a completely different level.”
A spokesman for Transport Infrastructure Ireland, which looks after the tolls, said a standard toll request/first penalty notice is issued if the toll is not paid by the 8pm deadline and an initial default toll of ¤3 per toll is added to the applicable toll. A letter is sent out informing the registered vehicle owner of this additional penalty for late payment.
He said that if our reader “made six journeys on the toll road that were not paid within 14 days of the standard toll request being issued, that would amount to ¤48.70 per journey, comprising the toll and the two additional default tolls, with a total of ¤292.20 owing after a five-week period . . . At all stages of the process a letter is sent out to the vehicle’s registered owner, informing them of the toll and the default amounts.”
