I live in Ireland but often buy things from Amazon in the UK.
I sometimes use services like Parcel Motel or AddressPal to buy items that won’t deliver to Ireland. But it’s also worth considering using these services to make a saving on VAT as well.
Amazon applies the VAT rate at checkout on goods according to the delivery address you select:
- If you use a UK delivery address, the price displayed in the checkout is the advertised price on the site, based on a VAT rate of 20%
- If you use an Irish delivery address, the price displayed in the checkout will be recalculated based on a VAT rate of 23%
This is because Amazon are required by the EU to collect VAT based on the country the customer lives in.
So, for instance, if you want to buy a set of headphones for £299.99, and get them delivered to the UK, then you will pay £299.99. But if you get them delivered to an Irish address, then you will pay £306.48. That’s nothing to do with shipping costs – both addresses can get free shipping – that’s because of the extra 3% VAT charged to Irish consumers.
When you think that Parcel Motel charges €3.95 at the moment to redirect a parcel from the UK to Ireland, you can still save a couple of quid.
And if you’re buying something really expensive, such as a top of the line Microsoft Surface Pro 4 for £1,799.99 it could cost you an additional £45 if it gets delivered to Ireland. But it’s worth noting that if you do consider taking delivery through Parcel Motel, their standard insurance only covers parcels up to a value of €100. To increase the insurance cover you need to pay an additional €10.50 to get extended liability cover for €1,500.
Changing money between different currencies can be expensive.
Traditional banks buy and sell foreign currencies from/to their customers at rates vastly different from the exchange rates you might see on the news. And while they may claim they don’t change fees, they do earn quite a bit of money by adding a mark-up to the exchange rate being offered.
There are, however, a number of disruptive financial companies emerging that can save you money. Companies like TransferWise, Revolut, and others.
- a Bank of Ireland transfer of €1,000 to a UK bank will get you £887.80.
- Using TransferWise to move the same €1,000 will get you £909.45. That’s a difference of £21.65 – or 2.5%!
- Using Revolut to transfer the €1,000 will get you £914.00. That’s a difference of £26.20 – or 3%
And as the numbers get bigger, the difference will start to matter a lot more. Move €5,000 and the difference between Bank of Ireland and Revolut is £131, so it’s definitely worth shopping around.
And if you want some cash in a foreign currency, the one thing to remember is to never ever change money at the airport. That’s where you’ll get the very worst rates. The same €1,000 converted to pounds at ICE in Dublin airport would get you just £861.
The best thing is to wait until you arrive at your destination, and then use the Revolut card to withdraw cash from an ATM. The first €200 ATM withdrawal per month doesn’t incur any fees – after that there is a 2% fee – but it’s still better value.
If you bank with AIB, KBC or the Bank of Ireland you’ll have been able to use their contactless debit cards for the last couple of years.
However Ulster Bank in the Republic of Ireland do not offer a contactless debit card. They have contactless on their ROI credit card, and they have it on their Northern Ireland debit card, but the bank have given no indication when it will be available on ROI debit cards.
It’s annoying for Ulster Bank customers, who can’t take advantage of the convenience of contactless payments.