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 Post subject: Re: Retail Watch Thread / The Death of retail ....
PostPosted: Mon Jan 01, 2018 2:35 am 
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captainchaos wrote:
ps200306 wrote:
Having just recently bought something as mundane as light bulbs online, being cheaper to buy in the UK and ship to Ireland than to go to the local DIY, I was interested to see DMcW's article in the IT:

Quote:
But the euro v sterling exchange rate is not determined by the events in Ireland. It is affected by world events. Therefore sterling won’t rise against the euro materially.

As a result there is a massive opportunity between the two zones of the all-island economy.

At these prices, it is an act of economic self-harm not to shop in the North. If you could do all your shopping in the North you could raise your disposable income by 30 per cent.

The benefits to the whole country of using the North as a “constitutional Lidl” – a bargain basement a few miles up the road – would be huge. Retailers in the Republic would almost certainly say that deserting the expensive South for the cheap North would destroy retail in the South. Granted, there would be some casualties, but more likely retail in the Republic would simply evolve.

Irish retail has never been destroyed by a 30 per cent increase in the disposable income of the Irish consumer.

More...

A typical sensational article from DMcW but badly researched as he ignores the different excise and vat rates between the two economies in his Guinness pint table.

I agree, that's why I skipped over his Guinness Index. But there's no getting away from the fact that cheap Sterling plus the lower overheads of online retailers gives Irish shoppers a unique opportunity. We're lucky that there's an amazon.co.uk in a language we understand (whereas there's never going to be an amazon.ie), and that "free shipping to the UK" generally includes Northern Ireland which means the huge UK retail market is only a Parcel Motel away.

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 Post subject: Re: Retail Watch Thread / The Death of retail ....
PostPosted: Mon Jan 01, 2018 10:11 am 
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ps200306 wrote:
I agree, that's why I skipped over his Guinness Index. But there's no getting away from the fact that cheap Sterling plus the lower overheads of online retailers gives Irish shoppers a unique opportunity. We're lucky that there's an amazon.co.uk in a language we understand (whereas there's never going to be an amazon.ie), and that "free shipping to the UK" generally includes Northern Ireland which means the huge UK retail market is only a Parcel Motel away.


Was wondering for some time if parcel motel and the likes are currently already operating in some type of customs grey area, and just being ignored by Revenue for the moment to avoid “Bad publicity”.
Essentially, using parcel motel means the Irish tax man doesn’t get its VAT that it would be due as the final receiver of the product is in the Republic.
It is going to be very interesting (or at a minimum somewhat noteworthy) indeed if those services will survive post Brexit, unless customs union is being retained.


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 Post subject: Re: Retail Watch Thread / The Death of retail ....
PostPosted: Mon Jan 01, 2018 11:08 am 
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newirishman wrote:
Was wondering for some time if parcel motel and the likes are currently already operating in some type of customs grey area, and just being ignored by Revenue for the moment to avoid “Bad publicity”.
Essentially, using parcel motel means the Irish tax man doesn’t get its VAT that it would be due as the final receiver of the product is in the Republic.
It is going to be very interesting (or at a minimum somewhat noteworthy) indeed if those services will survive post Brexit, unless customs union is being retained.

I don't understand that. Could you explain? What's the VAT difference between me ordering from Amazon UK and getting delivery to my Dublin address vs. to my N.I. Parcel Motel address?

Hadn't thought about Brexit implications for this. Might have to switch to Amazon.de.

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 Post subject: Re: Retail Watch Thread / The Death of retail ....
PostPosted: Mon Jan 01, 2018 11:13 am 
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newirishman wrote:
ps200306 wrote:
I agree, that's why I skipped over his Guinness Index. But there's no getting away from the fact that cheap Sterling plus the lower overheads of online retailers gives Irish shoppers a unique opportunity. We're lucky that there's an amazon.co.uk in a language we understand (whereas there's never going to be an amazon.ie), and that "free shipping to the UK" generally includes Northern Ireland which means the huge UK retail market is only a Parcel Motel away.


Was wondering for some time if parcel motel and the likes are currently already operating in some type of customs grey area, and just being ignored by Revenue for the moment to avoid “Bad publicity”.
Essentially, using parcel motel means the Irish tax man doesn’t get its VAT that it would be due as the final receiver of the product is in the Republic.
It is going to be very interesting (or at a minimum somewhat noteworthy) indeed if those services will survive post Brexit, unless customs union is being retained.

AFAIK this isn't a grey area.You've paid VAT in another EU jurisdiction so that's OK. Same as driving to the North and bringing it back - or driving over to France to get cheap wine - the duty and VAT has been paid in another EU country. I only use PM to get free UK delivery from Amazon or for stuff that they won't deliver to an Irish address. Things will be different after Brexit though.


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 Post subject: Re: Retail Watch Thread / The Death of retail ....
PostPosted: Mon Jan 01, 2018 11:20 am 
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Within the EU VAT is chargeable in the country of delivery rather than country of origin.

The policy was introduced a few years back to stop the kind of sales tax arbitrage that sees Amazon locate in Washington state.

When you go to actually purchase something on amazon.co.uk the final price changes (somewhat opaquely) when you put in a delivery address in Ireland. This is to account for the higher VAT rate (23% v 20%).

More:

Quote:
Buying online from another EU country

Special rules may apply when you buy goods from another EU country for delivery to your country of residence. If the company you buy from sells goods over a certain value to your country, where the goods are delivered, they cannot charge VAT in the country where you make your purchase.

Instead, they have to apply VAT in the country where the goods are delivered – VAT of destination. The total ceiling for cross-border sales is set by each EU country at EUR 35 000 or EUR 100 000. This means that most major online retailers delivering within the EU will have to apply the VAT of destination rule.



I have no idea if the Parcel Motel model is legitimate. I presume they claim that they are simply providing a service of transporting a product from one EU member state to another. And that it is not for resale and VAT has already been paid. I know this service exists elsewhere in the EU too.

From a Revenue collection perspective, VAT is in any case levied at 23% on the service Parcel Motel is providing you, which presumably makes up for most of the 23%-20% VAT differential between Ireland and the UK on the product itself.


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 Post subject: Re: Retail Watch Thread / The Death of retail ....
PostPosted: Mon Jan 01, 2018 11:22 am 
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ps200306 wrote:
newirishman wrote:
Was wondering for some time if parcel motel and the likes are currently already operating in some type of customs grey area, and just being ignored by Revenue for the moment to avoid “Bad publicity”.
Essentially, using parcel motel means the Irish tax man doesn’t get its VAT that it would be due as the final receiver of the product is in the Republic.
It is going to be very interesting (or at a minimum somewhat noteworthy) indeed if those services will survive post Brexit, unless customs union is being retained.

I don't understand that. Could you explain? What's the VAT difference between me ordering from Amazon UK and getting delivery to my Dublin address vs. to my N.I. Parcel Motel address?

Hadn't thought about Brexit implications for this. Might have to switch to Amazon.de.


Cross border VAT regulations state:

Quote:
If you sell goods and send them to consumers in another EU country, you need to register there and charge VAT at the rate applicable in that country - unless the total value of your sales to that country in the year falls below the limit set by the country (EUR 35 000 or EUR 100 000).


So if you get your stuff delivered to Dublin, Irish VAT rates apply and the VAT needs to be handed over to Irish Revenue. If you deliver to NI, UK VAT rates apply.

Irish Revenue loses a bit of VAT income from those ROI based customers who use parcel motel, as despite the final recipient being in ROI, the UK Gets the VAT. I have No idea how much.
I’m sure it is either rather complicated or grey enough area for the Irish Revenue not to crack down on this. You could argue along the lines of parcel motel being only an intermediary and not the final delivery point.


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 Post subject: Re: Retail Watch Thread / The Death of retail ....
PostPosted: Mon Jan 01, 2018 11:26 am 
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Skippy 3 wrote:
I have no idea if the Parcel Motel model is legitimate. I presume they claim that they are simply providing a service of transporting a product from one EU member state to another. And that it is not for resale and VAT has already been paid. I know this service exists elsewhere in the EU too.

From a Revenue collection perspective, VAT is in any case levied at 23% on the service Parcel Motel is providing you, which presumably makes up for most of the 23%-20% VAT differential between Ireland and the UK on the product itself.


Don’t know myself if it is legitimate but given they have been operating a few years now it doesn’t seem to be obviously illegal.

The 23% vat on the parcel motel service costs is significantly less than the vat on the product I’d say, given it is around 4 Euro per delivery. I am quite sure that it is much less than the average value of goods.


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 Post subject: Re: Retail Watch Thread / The Death of retail ....
PostPosted: Mon Jan 01, 2018 4:55 pm 
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newirishman wrote:
Skippy 3 wrote:
I have no idea if the Parcel Motel model is legitimate. I presume they claim that they are simply providing a service of transporting a product from one EU member state to another. And that it is not for resale and VAT has already been paid. I know this service exists elsewhere in the EU too.

From a Revenue collection perspective, VAT is in any case levied at 23% on the service Parcel Motel is providing you, which presumably makes up for most of the 23%-20% VAT differential between Ireland and the UK on the product itself.


Don’t know myself if it is legitimate but given they have been operating a few years now it doesn’t seem to be obviously illegal.

The 23% vat on the parcel motel service costs is significantly less than the vat on the product I’d say, given it is around 4 Euro per delivery. I am quite sure that it is much less than the average value of goods.

AnPost provide a similar service - 'Address Pal'. I imagine this is in order to claim some of this market?
I presume the state owned and run postal company isn't doing something that Irish Revenue are against? Then again, maybe!


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 Post subject: Re: Retail Watch Thread / The Death of retail ....
PostPosted: Mon Jan 01, 2018 6:47 pm 
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Thanks Skippy3 and newirishman. I never knew that. So for time being we benefit from 3% less VAT by shipping to an N.I. address. On items above a €100 or so that would pay for the Parcel Motel delivery.

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 Post subject: Re: Retail Watch Thread / The Death of retail ....
PostPosted: Mon Jan 01, 2018 6:52 pm 
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ps200306 wrote:
Thanks Skippy3 and newirishman. I never knew that. So for time being we benefit from 3% less VAT by shipping to an N.I. address. On items above a €100 or so that would pay for the Parcel Motel delivery.


If you are ramping your order value to max your VAT return :wink:, watch out for the insurance limit (€300?). One PM location was raided before Christmas. Extra insurance cover is available but will obviously eat into the VAT gain :wink:


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 Post subject: Re: Retail Watch Thread / The Death of retail ....
PostPosted: Tue Jan 02, 2018 1:15 am 
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AWAAF wrote:
ps200306 wrote:
Thanks Skippy3 and newirishman. I never knew that. So for time being we benefit from 3% less VAT by shipping to an N.I. address. On items above a €100 or so that would pay for the Parcel Motel delivery.

If you are ramping your order value to max your VAT return :wink:, watch out for the insurance limit (€300?). One PM location was raided before Christmas. Extra insurance cover is available but will obviously eat into the VAT gain :wink:

Nah, the VAT is just icing on the cake. The thing that has left me gobsmacked is that even low-value order items are cheaper to ship from the UK than to buy in Woodies. It's light bulbs this time around, in the past I've bought wall switches and a couple of metres of cable. It's cheaper, there's an incomparably greater selection, and I get to pick up at leisure from a nearby location. Why would I ever darken the door of a local shop again?! (Possible answer: 'cos Brexit's gonna wreck everything).

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 Post subject: Re: Retail Watch Thread / The Death of retail ....
PostPosted: Tue Jan 02, 2018 10:40 am 
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Is it your first time noticing you live on treasure island?
I really feel for business owners in this country with all their increasing costs, but the consumer will generally choose 'bargain for the buck' option everytime.
The next generation buy every non-perishable online. Our parents bought everything locally, we buy them globally - how can a local retailer survive that onslaught?
Even with Brexit, it'll intensify due to the 'regulatory alignment' stance adopted.
Plus there are extra online discounts available from cashback sites or the recent 20% off EbayUK that you won't get here.
10% of Ireland went North to donate to HMRC coffers for Christmas shopping.


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 Post subject: Re: Retail Watch Thread / The Death of retail ....
PostPosted: Tue Jan 02, 2018 3:07 pm 
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Well yes, big picture there is a hidden cost to buying everything online, if you wind up living in a ghost town with boarded up shops on main street. But we've been heading that way for ten years now.


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 Post subject: Re: Retail Watch Thread / The Death of retail ....
PostPosted: Tue Jan 02, 2018 11:39 pm 
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newirishman wrote:

The 23% vat on the parcel motel service costs is significantly less than the vat on the product I’d say, given it is around 4 Euro per delivery. I am quite sure that it is much less than the average value of goods.



Indeed, you're quite right. The breakeven price from a revenue collection point would be extremely low.


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 Post subject: Re: Retail Watch Thread / The Death of retail ....
PostPosted: Wed Jan 03, 2018 12:23 pm 
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Epicurus wrote:
Well yes, big picture there is a hidden cost to buying everything online, if you wind up living in a ghost town with boarded up shops on main street.


Rezone them as residential and we solve two problems at once.


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