VAT rates on Amazon

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.

Potential problems using Parcel Motel and Amazon

Parcel Motel is a great way to overcome delivery restrictions and outlandish courier costs when buying mail order in Ireland.

The service gives you a virtual delivery address in Northern Ireland, and then redirects your parcel to a locker of your choosing for you to pick up in a 48 hour window. And with many UK retailers refusing to ship to Ireland, or charging expensive shipping costs, the fee of €3.95 of using Parcel Motel can seem like a bargain.

However, there are potential downsides to using Parcel Motel with Amazon.co.uk:

  1. Your parcel might be too big – the maximum size of the largest locker is 41 x 38 x 64 cm. If your parcel ends up being bigger than this (and bear in mind the amount of packaging Amazon normally uses) then you will be charged an additional fee of €7.00, and you will have to collect your parcel from your nearest Nightline depot – or pay even more for it to be delivered to your house.
  2. Your parcel might be too heavy – there’s a weight limit of 10 kg per parcel, and if you go over it you have the same charges as for big parcels. They also have something called a dimensional weight calculation which calculates weight based on size – check out the prices page for more on that.
  3. Your Amazon order might be split into several parcels – even if you select that you want everything delivered in one go during the Amazon checkout, they may decided to dispatch your order in two or more packages – and Parcel Motel will charge you for each one. Even if two packages for you arrive into Parcel Motel at the same time, they won’t put them in the same locker.
  4. Your parcel might take an extra 2 days to get to you – depending on the time of day that Parcel Motel receive your package, and also on how busy they are, it might take 2 days to reach your locker. So if you’re in a hurry, it might be worth paying the higher shipping costs to deliver direct (i.e. don’t use Parcel Motel).
  5. You might not collect your parcel in time – you have 48 hours from the time you are notified your package is in the locker to pick it up. If you miss this window, it will be removed from the locker, and it’ll cost you extra to get to it. Bear this in mind if you’re going away on holiday or business travel in the next couple of weeks, because a delay from Amazon in shipping may mean it arrives in your locker while you’re away.

An alternate to Parcel Motel exists with a service from An Post called AddressPal. This service has the advantage of having an English virtual delivery address, instead of a Northern Ireland one, which is good for retailers who will only delivery to the British mainland. The AddressPal service allows you to collect your parcel from your local Post Office (which might have restricted opening hours) or get it delivered to your home. They also have a virtual delivery address in the USA.