Thursday 19 September 2019

Online shoppers to be hit with extra costs after no deal

Garret Bridgeman, Managing Director of An Post Mails & Parcels and Helen McEntee, the Minister for European Affairs. Photo: Maxwells
Garret Bridgeman, Managing Director of An Post Mails & Parcels and Helen McEntee, the Minister for European Affairs. Photo: Maxwells
Hugh O'Connell

Hugh O'Connell

Consumers are set to be hit with hundreds of euro in extra tax and customs charges for online shopping at Christmas if there is a no-deal Brexit.

A UK crash-out could add nearly €100 to the cost of designer clothing and more than €100 to the cost of some consumer electronics as VAT and customs duties will have to be applied.

Shoppers doing their Christmas gift buying online in November and December will have to factor in substantial new costs if the UK is no longer in the EU.

Lynda Slattery, the head of Revenue's Brexit Policy Unit, said that products bought from the UK would cost more than they do now with extra duties and VAT applied.

"Consumers will need to pay these taxes and duties before they will be able to get the goods they purchase," she said.

Irish people are among the largest online shoppers in the world, spending in the region of €5bn annually.

An Post insisted it had put in place contingencies to avoid disruption to the delivery of parcels, with some 14 million coming from the UK every year. This includes arrangements with Royal Mail in the UK to ensure trucks carrying parcels arriving at ports will be "green-laned" with parcels checked on arrival at An Post mail centres in Portlaoise, Dublin and Athlone rather than at the ports. A €15m parcel automation machine will help to speed up checks.

"We're ready and our objective with all of this is that this has no impact on our customers and they see a seamless transition and they can continue online shopping in a no-deal scenario," managing director of An Post's Mails and Parcels Garrett Bridgeman said.

Speaking at the postal service's mail centre in Portlaoise, Co Laois, yesterday, Mr Bridgeman said that larger online companies such as Asos and Amazon were working on a delivery duty paid model whereby they would incorporate the Irish VAT rate of 23pc into their display price.

"They will have made arrangements with Irish Revenue and the price you pay at the checkout will be the price that you pay when the item comes for delivery," he said.

But on a visit to the An Post facility, European Affairs Minister Helen McEntee said: "It's important that people know whether or not the company or the business they are buying from is doing that and that's what we're trying to highlight."

At present any item purchased from a non-EU country that costs over €22, or €45 if it is a gift, is subject to VAT, with any item over €150 also subject to import duty.

These rules will apply on purchases from the UK if it is no longer in the EU.

Examples on Revenue's website for goods bought outside the EU show that a €173 pair of designer jeans is subject to customs duty and VAT that bring the total cost up to €266.

A digital camera costing €301 is not subject to customs duty, but is subject to VAT and other handling charges that bring the cost to €420.

A no-deal Brexit will also mean EU consumer protection law will no longer apply to items purchased from the UK.

Shoppers are being urged to know where the company they are buying from is based, to read its terms and conditions on cancellations, exchanges or returns, and to find out what VAT and import charges will apply - and how these charges will be paid.

An Post will roll-out a new online system in the next six months that will notify consumers of any outstanding customs charges that can be paid online before the item is delivered.

Meanwhile, Ms McEntee said the Government's core planning was directed toward preparing for a no-deal Brexit at the end of October. She said there had been a change in "feeling and sentiment" since the Brexit deadline was extended last spring.

"We've moved some time ago to planning what was a central-case scenario for a deal, and obviously getting a deal is our goal and our objective still. However, our core planning has been directed towards a no-deal scenario now for some time," Ms McEntee said.

Meanwhile, Tánaiste Simon Coveney said with the Brexit deadlock "we still don't have the outcome that we're looking for which is a deal to prevent a no-deal Brexit".

He added: "The message... to everybody who's linked to Brexit - which most businesses in the country are - is to prepare for a no deal."

Irish Independent

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