Thousands of Britons are cashing in on exchange rates by shopping in the US for expensive items like iPods, digital cameras, or designer clothes. But many who think they have found bargains are falling foul of the law which requires them to pay duty on any purchase over £145.
By Matthew Davis
BBC News Online
Hunting the perfect outfit in NYC? Better remember the import duty
For those used to the duty-free environment of the European Union, it is probably the least understood of the restrictions that also govern imports of items like cigarettes, alcohol and perfume.
But go outside the EU to buy anything from a suit to a new laptop, and the chances are you will have to pay at least another 20% in duty and VAT when you land back in the UK.
Travel journalist Simon Calder says that on early morning flights back from the US there are "swat teams of customs officers" eyeing up the shopping bags in arrivals.
"Their first line of attack is often to ask to look into someone's wallet; it is there they will find the receipts for all those expensive items," said Mr Calder, travel editor for the Independent.
"Half the people may take their chances in the green channel, but the other half are often entirely ignorant of the law.
"It is a shame that the travel media says what a wonderful time it is shopping in New York, Hong Kong or Dubai, but fails to mention what you can bring back without having to pay."
On an iPod bought for $300, you'd pay an extra £32.75 at UK Customs
A customs spokesman conceded it was "very unlikely" that the typical retail tourist would be hauled over the coals for a pair of undeclared Jimmy Choos or a new MP3 player. But prosecutions can happen.
"If they go through the green channel knowing full well they have goods over the £145 limit then they will be breaking the law," said a spokesman. "If they are caught they will have to pay the duty."
The limit was set by the EU back in 1994; its level is not currently under review.
Know your commodity codes
But trying to calculate whether you can save money on goods bought abroad can be a tortuous process.
To find the duty rate for your item you have to call the Tarif and Statistical Helpline (01702 366 077). They will give you a commodity code, of which there are thousands, covering every kind of product.
Allowances from outside EU
200 cigarettes or 100 cigarillos or 50 cigars or 250gms tobacco
60cc/ml of perfume
250cc/ml of toilet water
2 litres still table wine
1 litre spirits or liqueurs over 22% vol or 2 litres fortified wine, sparkling wine or liqueurs
£145 worth of all other goods including gifts and souvenirs
It is not enough to know you are bringing in a digital camera; there is a different code for a camera, a camera with video capabilities, a digital video camera and even a DVC with "additional recording facilities".
Armed with your 10-digit code, you must then contact the Customs National Advice Service (0845 010 9000) to find the duty to be paid on your product.
For instance, a woman's handbag would attract a duty of 8%, plus 17.5% VAT, if its outer surface is leather, but duty of 14.7% (plus VAT) if it is plastic.
These duties are set by the European Commission, which in December added an extra 5% tariff to many goods imported into the EU from America.
On an iPod bought for $300 (£165), you'd pay an extra £32.75 at UK Customs after a duty of 2% plus VAT.
If you brought back a man's woven suit, bought in the States for $1,000 (£550), you'd have to fork out an extra £173.80 to bring it back into the UK. (Duty at 12% plus VAT).
"It is still worth going to find bargains abroad," says Mr Calder. "But it pays to know the law."
HM Customs and Excise says it runs regular campaigns to raise awareness of the laws affecting travellers. The next push is planned for the summer holiday season.
The import tariffs also affect goods bought over the internet, a spokesman added.
Add your comments on this story, using the form below.
It is telling that even if caught, a US iPod is still cheaper. If you are charged the import cost, you're still saving £50 over the UK retail price. A damning example of how Britain's consumers are overcharged and short-changed.
Also be aware of errors made by customs & excise - on a recent US purchase, $300 was incorrectly converted to be £300 and duty/VAT charged on that! Parcel Force arriving with a bill of £80 for £160 worth of goods is a joke.
Jon Hudson, UK
Buying second-hand from eBay also attracts this duty as my son found having made a successful bid for a $600 guitar. Not only did he receive the guitar but also an unexpected demand for duty and VAT.
A few weeks ago I tried to find out how much duty I would have to pay on camera accessories from New York. By the time I'd trawled the net for numbers, made the calls, explained what the items were and calculated the cost - the items had been reduced to the same price in the UK.
"If it looks too good to be true it usually is." This applies to so called bargain shopping trips abroad too. I have found the limit to bring back into the UK is very clearly advertised both here and at overseas airports. Ignorance is no defence. If you are unsure, check at the travel agents or airport of return. I'm afraid you only have yourself to blame if you get caught!
A top of the range 40GB IPod in the UK is £398.99 (from the Apple Store); in the States the exact same piece of hardware from the same store is $499.00 (£274). So what if I pay £34 on customs, it's still cheaper than Rip-Off Britain.
Simon Calder's "swat team" were not in evidence at Heathrow this morning.
This problem may rear its head closer to home - I have recently returned from a skiing trip in France where I decided to pop over the border to Switzerland for the day. I purchased a watch for my girlfriend worth £150 and on returning to France was told that as Switzerland was a non-EU member state, I would have to pay French VAT at 19.5% (on top of the 9.5% VAT I had already paid in Switzerland).
Nick Heap, UK
Fly to New York and have a week in a good hotel, have a wonderful time and some retail therapy. Pay your Customs dues with the money that you saved by not taking a holiday in Rip-Off Britain.
Geoff.F, Leamington Spa. UK
Whatever happened to free trade, eh?
William Luckman, England
The trick for me was heading through the Red Channel (in honest ignorance) with a list of what I had bought and what I had paid. The Customs bloke took one look and declared "if you think I'm going to fill out forms for this little lot..." So, be honest and be reasonable.
Swat teams of customs agents eh?! Never yet seen a customs officer in arrival back in the UK (Heathrow or Gatwick) on an early morning US flight. By the way there is another cost if you order by mail... If there is duty to pay, then Customs stop the package and then send it on again with a wee note that tells you what you have to pay to effect a hand over of the item... They get the Royal Mail to do this bit, and it ain't cheap. I ordered a couple of items from California and the cost to ship them from there to here was less than the Royal Mail decided to charge for shipping the same package for Heathrow to Oxfordshire... Still saved money though!
Does the US do this to Americans who buy in England? Just wondering.
It amazes me that these so called SWAT teams are targetting the shoppers surley their time would be better spent trying to catch the people who carry the drugs that flood through customs everyday rather than holiday makers who have picked a bargin.
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