Parcel from UK brings me with rogue tax bill
I am having problems with DPD and I am paying duty on a package I have received. The package in question contained some second-hand baby clothes (many hand-knitted) from my sister in the UK.
Hope you can give me some advice and readers in general as I imagine the problem I am having is quite widespread after Brexit.
My sister clearly marked the package and valued it at â¬ 50. I was told that I had to pay DPD â¬ 19 for customs before delivering the package. With our new baby on the way, I didn’t want to risk being late so I paid for it. However, I’m not sure how accurate or justified the charges were?
I have sent multiple emails to DPD but get automated responses and direct them to their ‘Brexit’ team who then ignore my emails completely. I tried to contact them on Twitter, but I’m told there’s nothing they can do. As well as being extremely poor customer service, it is certainly a shady practice: take people’s money and then ignore them or offer no help at all?
Any help or guidance you could give would be greatly appreciated. I know it’s only $ 19, but the idea of ââit happening en masse is worrying.
Mr. CF, e-mail
Brexit has undoubtedly threw a wrench in the works for people who usually send or receive parcels between here and the UK. This has clearly been a major upheaval for online shoppers, but it is also impacting people like you who have family there and receive birthday presents and other gifts from across the country. the border.
Your experience raises a number of questions which can be grouped under three headings: income rules; how couriers work; and customer service.
The result seems pretty clear to me. No tax should have been due on this parcel, but since your sister – like most people – did not know the inner workings of the tax code, she may have inadvertently mislabeled the parcel so that DPD assumed that a tax payment was due.
The tax rules are pretty clear, and in your case neither customs duties nor VAT should have applied.
First, Revenue states that you can receive a gift free of duty and VAT if the total value of the gift is less than $ 45. These 45 â¬ include the postage / courier costs and any insurance of the package.
To be eligible, the gift must be accurately declared and sent from an individual outside the EU to an individual in the EU – i.e. all commercial traffic is excluded, it does not apply so not if you actually paid for the item (s)). It must be for your personal or family use and it must be an occasional gift, i.e. to promote a birthday, anniversary or other.
Interesting fact about what parcel you received, when there are multiple items and the total is over 45 â¬, you can get tax exemption on all items whose value is below the limit of 45 â¬. So with your five items for a cumulative value of $ 50, you will likely get four for free and be subject to tax on the fifth.
At a customs rate of 2.5% on an item valued at â¬ 10, the invoice would be 25 cents.
Of course, VAT would also be due on this fifth element. But the VAT rates on goods imported from third countries are the same as those that would apply to goods purchased locally here. And it is relevant in this case because the Irish VAT rate on children’s clothing is zero. And while it is void on baby clothes purchased in Ireland, it is also void on all baby clothes imported as gifts, regardless of their value.
Revenue tells me that children’s clothing is âclothing described, labeled, marked or marketed as intended for children under 11 years of age up to and including breast size 32; waist size 26; height 152 cm or other equivalent sizes â. We will come back to this later.
So there is only the customs fee left, right?
Well no. Because a separate provision of “negligible value” exempts from customs duties goods with a value of less than 150 â¬. While the limit of â¬ 45 in the first measure only applies to gifts, the second, larger measure also applies to goods purchased outside the EU.
Revenue told me that “importers [thatâs you in this case] may choose to take advantage of the most advantageous relief when declaring the goods. For example, if an import is declared as a ‘gift’ and the value is greater than â¬ 45 but less than â¬ 150, then he / she may opt for exemption under the negligible value provisions â.
It should also be noted that, if you opt for the higher threshold, the VAT relief on gifts of less than â¬ 45 disappears but, as these are children’s clothing, this has no effect anyway. importance here because it is zero-rated.
So how come you were billed â¬ 19 by DPD, especially when your sister took care to write on the courier label: âContains a gift of old second-hand baby clothes many of which are from from Ireland (given as a gift). Homemade â?
This is where the confusion seems to have emerged. DPD told me several things. Firstly, where there are customs or VAT charges, DPD will separately charge a âbrokerage feeâ of â¬ 5 for the administration of tax collection etc. In all fairness, that doesn’t sound like too much.
However, when no tax should be due, as in your case, no charge is levied by the carrier. The same is true if, as is the case with some online purchases, the tax due is paid by the sender.
But, and this is the crux of the matter, DPD, like most modern courier / postal services, operates in an automated fashion. They will not read personal handwritten messages on packages; they go through the entry of printed and coded information before printing the label.
âWe rely entirely on the information declared in the data they provided to DPD UK when the goods were dispatched,â a DPD spokesperson told me. âSo if they used an HS code that was clothes and not baby clothes (there are specific HS codes for baby clothes on our system that don’t incur VAT), then we have to charge the VAT because the HS code for “clothing” is: women / girls / men / boys.
HS codes, as I know now, are shorthand for âharmonized system codesâ. This is a standardized series of numbers used by customs authorities around the world to classify products.
Likewise, Revenue tells me that in the case of gifts, the customs declaration form should be marked “gift” or “gift”, not just a handwritten note. If you are counting on the exemption of negligible value (on goods up to 150 â¬), the customs declaration must bear the mention Negligible value.
These are pretty detailed things and the problem here is that unless you are in the customs game or regularly send packages across customs borders, you really would have no reason to know. Granted, no occasional poster – including this writer – would have a clue … unless the DPD repository specifically alerted you to these details.
And that brings me to the third point – customer service. I suppose if the DPD depot had informed your sister about these tax niceties, she would have taken care to label the package correctly in the first place and no tax charges (or brokerage fees) would have been due. These things happen: busy depots, pissed off gifts and depot staff, etc.
However, you also didn’t have any fun dealing with DPD locally. You’ve reached them via email, followed their automated response instructions, and directed them to that particular Irish hell, the customer service black hole. It’s not acceptable. As you yourself say, taking people’s money and then ignoring them or not offering them any help doesn’t look good.
To be fair, DPD was very helpful in answering my questions. And they offered to continue your request if you can give me your parcel shipment number to pass on to them. However, as with so many people who contact us here, the point is that customer service should work without having to go through media channels.
From what I understood from DPD’s position, if they had a label that just said clothes, they would charge VAT at the standard rate of 23% – or â¬ 11.50 on a parcel of goods with a value of 50 â¬. The brokerage fees – given that under this interpretation the tax is due – would be â¬ 5. If it was not formally marked on the customs declaration form as a gift (as opposed to your sister’s handwritten note), a 2.5% customs duty would apply on the entire â¬ 50 plus shipping charges. This could well bring it to 19 â¬.
But, as we now know, no tax should have been owed.
DPD passes the tax on to Revenue, so I’m not sure if they can refund it to you and claim it itself. However, they should at least be able to point you in the right direction with Revenue to arrange for an overpaid tax refund. The tax authorities have no interest in collecting a tax that has never been due.
As for the brokerage fees, if the package was inadvertently mislabeled, I don’t see why DPD is required to reimburse you. But, especially given your experience with their customer service, I would like to think DPD would do this as a gesture of goodwill.
Please send questions to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email [email protected] This column is a reading service and is not intended to replace professional advice. No personal correspondence will be exchanged