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Buy a tech treat from abroad

Posted on 20 Aug 2010 at 11:22

“The import charges themselves are an incredibly complicated set of rules,” said Moneysupermarket’s Simon James, an assessment with which it’s difficult to argue. “I think it’s something a lot of people aren’t particularly aware of.”

Nailing down which of the 14,000 categories your new product will fall into is tricky, but a good place to start is HMRC’s list of common internet goods.

Baffling system

It’s something many consumers are likely to find baffling. A few years ago, Simon James bought a box set of DVDs from Amazon.com for his wife.

“I got them for about £50,” he said, “but when they turned up in the country, I had to pay something like another £40 to actually take delivery of the item.” The added duty and VAT charges were so severe that he admitted defeat. “Ultimately, it was so much that I ended up simply having the product returned to Amazon, and I received a refund on it.”

He believes retailers often make the situation worse by failing to bring international shoppers’ attention to the possibility of import taxes. “The retailers usually hide stuff away in the small print about the fact you might be liable to pay import charges.”

Dynamism CEO Douglas Krone agrees that it’s a fine line to tread. He said there’s no “practical way” for a small or medium-sized company to claim back VAT from the British government, so Dynamism doesn’t add it at the point of sale, although VAT is estimated on Dynamism’s site.

We tell people to assume they’re going to pay it

“We tell people to assume they’re going to pay it,” he said.

Amazon.com – which perhaps is at an advantage because of its size – goes one better. When you head to the checkout, an Import Fees Deposit is added, covering you for customs duty and VAT. If the delivered amount is less, the difference is refunded.

But if retailers don’t always make life easy on consumers, HMRC itself makes matters worse. While researching this feature, PC Pro appealed for help from consumers who had bought technology products from abroad. Some said they’d been charged VAT and customs duty on their imports, while others avoided the same charges. That uncertainty, said Simon James, leads to consumers being “stung”.

“People get stung occasionally, because maybe on the first couple of orders it does slide through the system, and they don’t get caught,” he said. “Then they get overconfident, and then they do get stung on something.”

For its part, HMRC said “many millions of items” are imported to the UK every year. A spokesperson told PC Pro that it “has to strike a careful balance between ensuring compliance and enforcement costs… while avoiding unnecessary impacts on UK markets and loss of tax revenue.”

In other words, the cost of checking the value of every package arriving in the UK would be prohibitive. It’s also unlikely the UK Border Agency, whose job it is to assess customs and VAT on incoming air passengers, would be able to prove an electronic device was bought abroad if the box and receipt were missing.

Worth the effort?

For products that are unavailable in the UK, British buyers are left with an easy choice: buying online can net you exciting products first, and buying from abroad is easier than ever, either through established vendors such as Amazon, or independent sellers on eBay.

But the water is muddier for bargain-hunters. Rip-off Britain is still alive and well, with products for sale in the UK opportunistically priced higher by manufacturers.

But with taxes on imported electronic goods adding as much as a quarter to the final price, bargains on tech treats may not always be as they first appear.

Author: Dave Stevenson