Fedex Ireland and unfair duty charges

I’ve been on vacation for a week, introducing Bea to the many joys of the bogs of Connemara. I think she liked it.

While I was away, I appeared in Ireland’s newspaper of record, the Irish Times, specifically in Conor Pope’s ‘Pricewatch’ consumer-affairs column, under the byline “Shopped to the taxman”. Here’s a cut-and-paste of some relevant snippets:

Justin Mason [hey, that’s me] contacted Pricewatch after being hit with just such a charge. In August, he and his wife, who were expecting a baby, received a package from friends in the US [thanks Nishad and Janet!] containing amongst other things, some hats, socks and a little hoodie for their baby.

“It was shipped via FedEx, got here in good time and was very cute,” he says. The couple were delighted, until a couple of weeks later, when they received an invoice from FedEx looking for EUR 34.47, made up of EUR 2.49 duty, EUR 19.88 VAT and EUR 10 in “administration fees”, plus an additional EUR 2.10 VAT on the “administration fee”.

“This strikes me as pretty unfair, maybe there’s duty payable, but I’ve never had to pay VAT on a gift I’ve received before? On top of that, being charged one-third of the price as an administrative fee? Ouch!”

The couple disputed the fee and were told if they didn’t pay, the invoice would be sent to a debt collection agency and non-payment would affect their credit rating. A couple of weeks later, another gift arrived from the US, followed by another invoice looking for EUR 7.84 in duty, plus the EUR 10 administration fee and EUR 2.10 VAT on that fee. Mason disputed the charge and was eventually told it would be waived as it had a value of less than $50 (EUR 34.70) and was clearly labelled as a gift. There is tax relief called Small Parcel Standard Relief on goods purchased from outside the EU, which is EUR 22 for bought goods and EUR 45 for gifts, so the tax should never have been applied by FedEx.

We contacted FedEx and UPS, highlighting our readers’ concerns. A spokesman for FedEx said the administration charge has always been in place in Ireland and was applied “to ensure customers receive their packages quickly”.

He said that if it did not pay the VAT and duty, “packages would not be cleared through customs until the customer has paid them, thus adding severe delays to the delivery process”.

So, to be honest, I’m not impressed at all with Fedex’ response here. I was hoping they’d be more helpful, especially once it hit the most significant consumer-affairs column in the country — but not at all :(

To recap — since Conor didn’t mention it — here are my problems with the charges:

  • the packages were both genuine, unsolicited, gifts. Surely having to pay duty on a gift is not applicable; it certainly makes receiving a gift a particularly unpleasant experience!

  • the first package contained baby clothes, which are VAT-free in Irish tax law anyway.

  • we cannot seem to get contact details for someone at Customs and Excise to talk to about this, and Fedex have failed to get back to us since then.

Not sure what the next step is…

There’s also a little follow-on discussion at Conor’s blog.

Update: good news. A couple of days ago, a letter arrived from Fedex UK, containing 2 credit notes; both invoices had been reduced to EUR 0.00, citing “incorrect application of duty” for one, and “customer satisfaction policy” for the other. Hooray!

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  1. droid
    Posted March 1, 2013 at 11:30 | Permalink

    Ive been through this 5 or 6 times now with DHL, FedEx & UPS and the prescription remains the same.

    Call them and say that you are happy to pay all applicable duties, VAT/Tax etc… but as you have not entered into any contract with them that you will not pay their ‘handling fee’ or ‘admin charges’, and that they have no legal right to charge you these fees. If they insist, ask to see the contract that enforces payment, and when they cant produce it, tell them you will happily go to court if they wish to pursue the matter.

    Everytime they’ve told me they’d ‘make an exception, this one time’. Ive paid the VAT duty and that’s been the end of that. They will never, ever go to court for this, though it’s possible you may get put onto some kind of blacklist, though that hasn’t happened to me.

  2. aman kohli
    Posted May 21, 2013 at 12:49 | Permalink

    so I found Fedex’s small print (and it is small print) at

    on taxing and service charges:

    Important notice: FedEx currently charge an administration fee of 2.5% of the combined Duty & VAT charge or 10.00 (whichever is greater). Start date implementation: June 18th, 2007.

    Note the Gift Criteria –

    Your package must meet the Customs gift criteria: 1. It must be sent person to person. (consignee must take delivery at a private address) 2. The total value must not exceed $50.00 per person (Approx. 45) 3. Ensure the word ‘GIFT’ is marked on the AirWaybill. NB. Customs & Excise make the final decision on all import classifications.