Neale Richmond: Consumers are starting to learn the price of Brexit
Customs charges are leading to nasty surprises for some online shoppers
With Brexit having loomed on the political landscape for years, much of the focus of discussions were on free trade, tariffs and quotas, and the Irish border. Now that Brexit is a reality, the effects on our daily lives are quickly coming into focus.
The new normal of customs charges when shopping online and ordering from the UK is one Brexit dividend that many consumers and businesses did not expect.
With the UK out of the European Union and the Single Market, extra costs can arise when online shopping. Only goods ordered from the UK that are of proven UK origin are free of tariffs under new rules. Goods ordered from the UK but not of British origin costing more than €150 may be subject to customs charges, leading to a nasty surprise when they arrive on doorsteps here in Ireland.
Irish Vat charges currently apply only on goods ordered from the UK costing more than €22. However, after new EU rules are introduced on July 1, all online orders from outside the EU will be subject to Vat. Additionally, all orders of alcohol, tobacco and perfumes will be subject to Vat, customs charges and excise duty, regardless of their value.
Given that a recent Competition and Consumer Protection Commission study found that only 15 per cent of consumers knew that buying from non-EU companies online would lead to taxes and charges, and 70 per cent of Irish online orders are from the UK, these changes will come as a surprise to the vast majority of shoppers.
For regular online shoppers and those of us who have taken to online shopping over the past year due to Covid-19 restrictions, these charges pose a major disruption.
One option commonly mentioned to avoid these charges is to order from .ie or .eu websites. This is not a magic wand to avoid charges, however. To obtain a .ie web address, companies only need to have a connection to Ireland, they do not need to be based here.
With this in mind, how are consumers expected to avoid these customs charges? Though it will take extra work, much can be gleaned from reading the terms and conditions prior to placing your order. The company’s registered address should be included here.
If they are registered within the EU, they are required to provide their address and also list the consumer protections they afford their customers. If you cannot find this information, ordering from another website may be a safer bet.
For websites not based in the EU, different consumer protection rules may apply and so it is important to read through exchange or returns policies before placing your order.
Over time we may see more companies relocating to the EU to avoid these customs quandaries and to make them more attractive to European customers. Amazon is said to be considering establishing a distribution centre in Dublin to bypass these additional charges and allow for faster delivery times to Irish customers.
One way to avoid such charges is to support local and Irish businesses where possible. Shopping local is always important, but is especially so after such a difficult year of restrictions on business. This will not always be possible and so consumers must exert caution when ordering online and carry out their own due diligence.
While these charges are unfortunate and regrettable, as we have heard so many times over the past four years, Brexit means Brexit and it is now coming home to roost.
Neale Richmond is a Fine Gael TD for the Dublin-Rathdown constituency