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.

Value Added

With today’s news about the cut in VAT rates in the UK starting from next Monday, it seems highly likely that I’ll be joining countless thousands of other residents of the Republic, in heading to Northern Ireland to do my Christmas shopping.

With Ireland’s recent rise by 0.5% to a VAT rate to 21.5%, the new UK rate of 15% makes shopping North of the boarder incredibly attractive, particularly as the Pound is also so weak against the Euro at the moment.

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