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.

House of Fraser savings in Ireland

The UK department store House of Fraser only has one branch in Ireland, in the Dundrum shopping centre in Dublin.

It’s a nice enough store, but the prices charged to Irish customers are not always the most competitive, particularly when compared to the same products in the store’s UK branches.

This is a problem that a lot of Irish consumers face when shopping in foreign-owned stores, as the price conversions from pounds to euros (or dollars to euros) often don’t reflect the current exchange rate.

A case in point is that we were recently shopping for a big-ticket electrical item, and the price in-store in Dundum was listed as €480. As it happens, the only one of this item they had in stock was faulty, and so the store gave us a refund on a gift card and advised us to order direct from the House of Fraser website.

And so we looked and found the item available on the website for £395 (at current exchange rates, €468) – with free delivery available either to the Dundum store or to anywhere in Ireland. That’s a saving of €12.

However, when we used the gift card to pay their website gave a very generous conversion rate of euros to pounds – 91p for a euro, rather than the prevailing exchange rate of 84p for a euro – and that means we paid even less, just €435!  A total saving of €45.

And so the message is clear. If you want to save money when shopping in the Dublin House of Fraser, go into the store and buy a gift card, then use that gift card to order on their website. You’ll end up saving around 10% off the physical store prices.

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