I’ve been on vacation for a week, introducing Bea to the many joys of the bogs of Connemara. I think she liked it.
While I was away, I appeared in Ireland’s newspaper of record, the Irish Times, specifically in Conor Pope’s ‘Pricewatch’ consumer-affairs column, under the byline “Shopped to the taxman”. Here’s a cut-and-paste of some relevant snippets:
Justin Mason [hey, that’s me] contacted Pricewatch after being hit with just such a charge. In August, he and his wife, who were expecting a baby, received a package from friends in the US [thanks Nishad and Janet!] containing amongst other things, some hats, socks and a little hoodie for their baby.
“It was shipped via FedEx, got here in good time and was very cute,” he says. The couple were delighted, until a couple of weeks later, when they received an invoice from FedEx looking for EUR 34.47, made up of EUR 2.49 duty, EUR 19.88 VAT and EUR 10 in “administration fees”, plus an additional EUR 2.10 VAT on the “administration fee”.
“This strikes me as pretty unfair, maybe there’s duty payable, but I’ve never had to pay VAT on a gift I’ve received before? On top of that, being charged one-third of the price as an administrative fee? Ouch!”
The couple disputed the fee and were told if they didn’t pay, the invoice would be sent to a debt collection agency and non-payment would affect their credit rating. A couple of weeks later, another gift arrived from the US, followed by another invoice looking for EUR 7.84 in duty, plus the EUR 10 administration fee and EUR 2.10 VAT on that fee. Mason disputed the charge and was eventually told it would be waived as it had a value of less than $50 (EUR 34.70) and was clearly labelled as a gift. There is tax relief called Small Parcel Standard Relief on goods purchased from outside the EU, which is EUR 22 for bought goods and EUR 45 for gifts, so the tax should never have been applied by FedEx.
We contacted FedEx and UPS, highlighting our readers’ concerns. A spokesman for FedEx said the administration charge has always been in place in Ireland and was applied “to ensure customers receive their packages quickly”.
He said that if it did not pay the VAT and duty, “packages would not be cleared through customs until the customer has paid them, thus adding severe delays to the delivery process”.
So, to be honest, I’m not impressed at all with Fedex’ response here. I was hoping they’d be more helpful, especially once it hit the most significant consumer-affairs column in the country — but not at all :(
To recap — since Conor didn’t mention it — here are my problems with the charges:
the packages were both genuine, unsolicited, gifts. Surely having to pay duty on a gift is not applicable; it certainly makes receiving a gift a particularly unpleasant experience!
the first package contained baby clothes, which are VAT-free in Irish tax law anyway.
we cannot seem to get contact details for someone at Customs and Excise to talk to about this, and Fedex have failed to get back to us since then.
Not sure what the next step is…
There’s also a little follow-on discussion at Conor’s blog.
Update: good news. A couple of days ago, a letter arrived from Fedex UK, containing 2 credit notes; both invoices had been reduced to EUR 0.00, citing “incorrect application of duty” for one, and “customer satisfaction policy” for the other. Hooray!