I’m hoping you can offer some advice to myself, and readers in general, as I’d imagine the issue I’m having is quite widespread after Brexit.
My sister marked the package clearly and valued it at €50. I was told I needed to pay €19 customs to DPD before they would deliver the package. With our new baby en-route, I didn’t want to risk any delays and so paid it. However, I’m not sure how accurate or warranted the fee was?
I’ve emailed DPD several times but get automated responses and directed to their “Brexit” team who then ignore my emails completely. I’ve tried contacting them on Twitter but am being told there’s nothing they can do. As well as being extremely poor customer service, surely this is a dodgy practice – taking people’s money and then ignoring them or offering no assistance?
Any help or guidance you could give would be much appreciated. I know it’s only €19, but the thought of this happening en masse is worrying.
Mr C.F., email
Brexit has undoubtedly thrown a spanner in the works for people who habitually send or receive parcels between here and the UK. It’s clearly been a major upheaval for online shoppers but also impacts people like yourself who have family over there and receive birthday presents and other gifts across the border.
The bottom line seems to me to be quite clear. No tax should have been due on this parcel but as your sister – like most people – did not know the inner workings of the tax code, she may inadvertently have mislabelled the parcel in a way that meant DPD presumed a payment fo tax was due .
First, Revenue states that you can receive a gift free from customs duty and VAT if the full value of the gift is less than €45. That €45 includes the cost of postage/courier services and any insurance of the parcel.
To qualify, the gift has to be declared accurately and sent from a private individual outside the EU to a private individual in the EU – i.e. all commercial traffic is excluded, so it doesn’t apply if you have actually paid for the item(s). It must be for the personal use of you or your family and it must be an occasional gift – i.e. to market a birthday, an anniversary or some such.
Interestingly in relation to this parcel you received, where there are multiple items and the total is more that €45, you can get relief from tax on all the items whose value is below the €45 limit. So, with your five items for a cumulative value of €50, you’d likely get four of them free and be liable to tax on the fifth.
At a customs rate of 2.5 per cent on a item value of €10, the bill would be 25 cent.
Of course VAT would be due on this fifth item as well. But VAT rates on goods imported from third countries are the same as would apply on goods purchased locally here. And that’s relevant in this case because the Irish VAT rate on children’s clothes is zero. And if it is zero on baby clothes bought it Ireland, it is also zero on any baby clothes imported as a gift – regardless of value.
Revenue tells me that children’s clothing is “clothing described, labelled, marked or marketed as being for children under 11 years of age up to & including chest size 32; waist size 26; height 152 cm or other equivalent sizes”. We’ll come back to that later.
So that leaves just the Customs charge, yes?
Well no. Because a separate “negligible value” provision exempts goods with a value of less than €150 from customs duty. While the €45 limit in the first measure applies only to gifts, the second, broader, one applies also to goods bought from outside the EU.
Revenue tells me that “importers [that’s you in this case] may choose to avail of the relief which is most beneficial when declaring the goods. For example, if an import is declared as a ‘gift’ and the value is in excess of €45 but less than €150, he/she can then opt to claim relief under the negligible value provisions”.
Also worth noting is that, if you opt for the larger threshold, the VAT relief on gifts under €45 disappears but, as this is children’s clothing, that’s irrelevant here anyway as it is zero rated.
So, how come you got charged €19 by DPD, especially when your sister took care to write on the courier label: “Contains a gift of old secondhand baby clothes many of which originated in Ireland (given as gift). Some home made” ?
This is where the confusion seems to have emerged. DPD told me several things. First, where there is a customs or VAT charge, DPD will separately levy a €5 “brokerage fee” for administering the tax collection etc. In fairness, that doesn’t sound excessive.
However, where no tax should be due, as in your case, no fee is levied by the courier.The same is true if, as happens with some online shopping, the tax due is paid by the sender.
But, and this is the critical point, DPD like most modern courier / postal services operates on an automated basis. They don’t go reading personal handwritten messages on parcels; they go by the printed and encoded information input before the label is printed.
“We go completely by the information declared in the data they gave to DPD UK when the goods were sent,” a spokeswoman for DPD told me. “So if they used a HS code that was clothes and not baby clothes (there are specific HS codes for baby clothes on our system that do not incur VAT) then we have to charge VAT because the HS code for just “clothes” is: women / girls / men / boys.”
HS codes, as I now know, is shorthand for “harmonised system codes”. This is a standardised series of numbers used by customs authorities globally to classifying products.
Similarly, Revenue tells me that, in the case of gifts, the customs declaration form should be marked “gift” or “present”, not simply a handwritten note. If you are relying on the negligible value exemption (on goods up to €150), the customs declaration needs to be marked Negligible Value.
This is pretty detailed stuff and the issue here is that, unless you are in the customs game or regularly send parcels across customs borders, you’d really have no reason to know this. Certainly, no occasional poster – including this writer – would have any idea… unless the DPD depot specifically alerted you to these details.
And that brings me to the third point – customer service. I’m assuming, if the DPD depot had notified your sister of these tax intricacies, she would have taken care to label the parcel correctly in the first place and no tax charge (or brokerage fee) would have arisen. These things happen: busy depots and hassled gifters and depot staff etc.
However, you’ve also had no joy dealing with DPD locally. You’ve contacted them by email, followed the guidance of their automated response and got directed to that particular Irish hell, the customer service black hole. That’s not acceptable. As you say yourself, taking people’s money and then ignoring them or offering no assistance is not a great look.
To be fair, DPD has been very efficient in responding to my queries. And they have offered to chase down your query if you can give me your consignment number of the parcel 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.
On my understanding of DPD’s position is that if they had a label simply saying clothes, they would charge VAT at the standard rate of 23 per cent – or €11.50 on a parcel of goods worth €50. The brokerage fee – given that under this interpretation tax is due – would be €5. If it was not marked formally on the customs declaration form as a gift (as against your sister’s handwritten note), custom’s duty of 2.5 per cent would apply on the full €50 plus the postage cost. That could well bring it to €19.
But, as we now know, no tax should have been due.
DPD passes the tax on to Revenue, so I’m not sure if they can refund that to you and claim it backk off Revenue themselves. However, they should at least be able to point you in the right direction with Revenue to arrange a refund of tax wrongly paid. Revenue has no interest in collecting tax that was never due.
As for the brokerage fee, if the parcel was mislabelled inadvertently, I cannot see how there is any obligation on DPD to refund you. But, not least given your experience with their customer service, I’d like to think DPD would do so as a gesture of goodwill.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email [email protected] This column is a reader service and is not intended to replace professional advice. No personal correspondence will be entered into