UPS Ireland Lost Package and looking for Money

I hope you guys can give me some advice.

I live right on the border of Rep. of Ireland and Northern Ireland and shipped a camera lens worth €900 to the UK for repair work which cost almost €500.

UPS delivered it back to me but were looking for a custom charge of €162.50.

The driver told me that the best thing to do would be to return it to the UK and get them to post it to a Northern Ireland address (because it's in the UK).

This was the last I seen of this lens.

I was back and forth with UPS and Fixation (the repair guys) for about four months before I just gave up. UPS told me that the package was unretrievable.

Anyway, about one year has passed and now UPS has got a debt collection agency on to me still looking for the custom charge of €162.50. (really rubbing salt in the wounds).

Has anyone any advice on what I can do? Do I just pay the money and cut my losses (which already is over €1000) as I'm never going to see this lens again.