Why do we get stung in UK for computer parts?

MatTheCat

MatTheCat

MatTheCat

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I am lined up to buy a very recently released Haswell laptop. The top end version of this laptop as RRP of 3000 USD, but I am getting a slightly lower specced version.

It will cost me 2400 GBP. To get more or less the same thing imported from a US retailer, it would cost me just 2000 GBP, and that is taking 20% VAT into consideration.

Is there a good reason why UK retailers jack up thier prices so much other than exploiting a captive market where many people prefer not to risk buying from abroad? Or is their any kind of additional import duty that I am overlooking?
 
There are a load of taxes/duties to be paid when importing stuff. Majority of overseas etailers tend to package stuff and mark it as a 'gift' so as not to attact specific duties. However, I think this only works upto a certain value.

So for example, you've ordered a camera lens worth £2.5K in UK value, but paid £2K for it from overseas.

To avoid extra charges you'd have to mark as a gift and put a much lower value on it. If this parcel then gets mislaid or damaged in transit, it will only be insured for the value declared, leaving you a couple of grand short!

This is how it used to work, not sure it does any more - they may be more strict now.

A quick Google brings:

http://www.hmrc.gov.uk/customs/tax-and-duty.htm

http://www.dutycalculator.com/help_center/Import-duty-taxes-when-importing-into-the-United-Kingdom/

And a load more links, but that's a starting point there. It's always best to ask the seller if they're aware of any import duties you may be expected to pay. If there are any duties to pay, you must pay them before the parcel is released to you.
 
Another issue that effects the end user price will be variances on exchange rate. A lot of products that OcUK sell will be brought into the UK based on their suppliers buying the products and selling to OcUK in USD or Euro. Even the smallest of changes can have a really big impact on the cost price to OcUK which ultimately determines the UK street price price
 
Enigma80 said:
There are a load of taxes/duties to be paid when importing stuff. Majority of overseas etailers tend to package stuff and mark it as a 'gift' so as not to attact specific duties. However, I think this only works upto a certain value.

So for example, you've ordered a camera lens worth £2.5K in UK value, but paid £2K for it from overseas.

To avoid extra charges you'd have to mark as a gift and put a much lower value on it. If this parcel then gets mislaid or damaged in transit, it will only be insured for the value declared, leaving you a couple of grand short!

This is how it used to work, not sure it does any more - they may be more strict now.

A quick Google brings:
http://www.hmrc.gov.uk/customs/tax-and-duty.htm

http://www.dutycalculator.com/help_center/Import-duty-taxes-when-importing-into-the-United-Kingdom/

And a load more links, but that's a starting point there. It's always best to ask the seller if they're aware of any import duties you may be expected to pay. If there are any duties to pay, you must pay them before the parcel is released to you.
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So to take advantage of foreign retail prices such as offered on Ebay, the UK consumer would basically have to play cat n mouse with UK customs....or be straight up, and end up paying more or less them same....

Thanks for the links.....but there is apparently 14'000 different categories of import duty and tax. Not really into doing a research project myself on this, but thought that some people may just happen to know the answer to this.

Loki said:
Another issue that effects the end user price will be variances on exchange rate. A lot of products that OcUK sell will be brought into the UK based on their suppliers buying the products and selling to OcUK in USD or Euro. Even the smallest of changes can have a really big impact on the cost price to OcUK which ultimately determines the UK street price price
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Although this laptop is ordered through OcUK, it is the same thing everytime. When the HD7970 was released a couple of years back, the RRP was 499USD. Great I thought, that I will cost us about 300GBP? (exchange was more favourable at the time). No, the average price of these cards upon release in the UK was just short of 500GBP.
 
I bought some lenses a while back, when there were almost two USD to GBP, and I managed to land myself some lenses from a UK retailer who sources goods from abroad. Those same lenses are nearly double the cost the buy. So if I had to replace them for whatever reason I'd be paying double.

The exchange rate makes a big difference. As you state though, I think it is fairly political, they will charge what they think people will pay. What chunk of the average US salary is $499 compared to £499 of the average UK salary?

You can buy british products in the US, but they end up costing a lot more than here, obviously there's a novelty factor in it for them too - I don't think we have that here for US products do we?
 
Just think of us in N.I. - most places destroy us by adding in quite unreasonable P+P charges :-/ atleast in mainland a lot of places offer some form of free postage
 
If you want a rip off look at Australia. Prices are far higher here on just about everything.

I worked out that importing 32kg of hi fi speakers, express air freight too, from the UK was still ~15% cheaper than the Australian retail price.

Another example is the price of photoshop. It is cheaper to fly to LA, stay overnight in a hotel, buy two copies of it and fly back to Australia!
 
snitcher said:
if you import you will have to pay 10% import duty on top of the 20% vat.
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Good Answer!

That would leave me just 233 GBP worse off buying here than importing from USA.

Lazder said:
This isnt that high... In russia technology is like nearly x2 the price that it is in USA..
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Russia is different. In Russia businesses have to deal with multiple layers of corruption which puts the cost of everything up.

In the UK, we are dealing with government (opnely) imposed tariff's, taxes, with a pinch of captive marketeering.
 
Also, as I understand it, purchases online in the USA are not priced with sales tax included - they are supposed to be reported on state income tax returns and the sales tax is paid that time.

Myth # 2: Internet purchases are not subject to sales tax

False. Many times you won’t be charged sales taxes when you purchase items online, but this doesn’t mean that you don’t owe tax on the purchase. Most online retailers only charge sales tax in certain states because of a concept called Nexus. This federal precedent only requires retailers to collect sales taxes in states where they have a physical presence.

However, consumers are technically supposed to report these purchases on their state income tax return and pay the sales taxes at that time. There are several pending court cases and even a proposed federal regulation aimed at changing these Nexus laws, so tax-free online sales may soon be a thing of the past.
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http://taxes.about.com/od/statetaxes/a/sales-tax-myths.htm

http://taxes.about.com/od/statetaxes/a/Main-Street-Fairness-Act.htm
 
GeX said:
Also, as I understand it, purchases online in the USA are not priced with sales tax included - they are supposed to be reported on state income tax returns and the sales tax is paid that time.


http://taxes.about.com/od/statetaxes/a/sales-tax-myths.htm

http://taxes.about.com/od/statetaxes/a/Main-Street-Fairness-Act.htm
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I am now much more clued up on the ins and outs of the situation.

Even with:

VAT
Bank International Currency Changing Fees
International Shipping
+
Customs Handling Fee

Buying computer goods from the US will often, and indeed in this case, work out still considerably cheaper than buying here in the UK. I don't quite get why this should be as the US is not a 3rd world nation or anything that pays their people $10 per day.

I suppose if someone is buying relatively low value or moderate value goods such as a GFX card or something, then we can accept the price mark ups in exchange for not having deal with potential hassles of international shipping etc....but for higher value items, the cost savings get too big to ignore.
 
MatTheCat said:
Even with:

VAT
Bank International Currency Changing Fees
International Shipping
+
Customs Handling Fee

Buying computer goods from the US will often, and indeed in this case, work out still considerably cheaper than buying here in the UK. I don't quite get why this should be as the US is not a 3rd world nation or anything that pays their people $10 per day.
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Because as mentioned above US items have a sales tax which is not (currently) applied to on-line sales to foreign customers. If (and when) we had to pay that it would even out if not tip the scales.
 
ubersonic said:
Because as mentioned above US items have a sales tax which is not (currently) applied to on-line sales to foreign customers. If (and when) we had to pay that it would even out if not tip the scales.
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If I were a US based customer, I would not have to pay:

VAT (20%)
International Currency Change Fees (~2.5%)
International Shipping (~ $150 on items up to 7.5Kg)

If I were a US customer, I would have to pay 'sales tax' (varies by state and county, but anywhere between 5%-7%)

How does this even out?

With regards to the item that I am buying that has got me looking more closely at this, I could pay all of the above when purchasing from US, and still be markedly cheaper in doing so than by buying in the UK.
 
MatTheCat said:
If I were a US based customer, I would not have to pay:

VAT (20%)
International Currency Change Fees (~2.5%)
International Shipping (~ $150 on items up to 7.5Kg)

If I were a US customer, I would have to pay 'sales tax' (varies by state and county, but anywhere between 5%-7%)

How does this even out?
Click to expand...

Because you (like everyone else ordering from the USA) are currently exploiting a loophole in the way US sales tax works with online sales and in the future it is expected to be added at the point of sale for international orders, which means you will have to pay all of the above, evening it out.
 
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