It remains extraordinary how prices for so many goods in the US are much lower than in the UK. A Microsoft Surface Pro 3 tablet retailing on Amazon in the UK is £800, while on Amazon US it is £623. An Urban Decay eyeshadow “palette” that is £72.99 on the UK site is £38 over there. A Sony PS4 gaming console retails here for £329, there for just over £250. Closing the gap are the growing number of companies that now allow British online buyers to visit a US site, give an address in the US and then get it shipped over to the UK. So if you live in Purley rather than Peoria, you can take part in today’s Cyber Monday deals at bargain basement US prices. But is it really worth the effort?
MyUS.com thinks so. It claims to be the biggest forwarding business, with a warehouse in Florida sending goods to 300,000 customers around the globe. Australians are the biggest customers, battling famously high Antipodean prices (and no local version of Amazon). The Japanese, it seems, buy lots of Dyson vacuum cleaners this way (which means they are designed in Wiltshire, made in Malaysia, shipped to a US port, distributed to a store, sent to Florida then shipped over to Japan, in a great example of the madness of global logistics). Brits like it for clothes rather than electronics, which perhaps is not that surprising if you’re a fan of brands such as Ralph Lauren, where the price differentials are considerable.
The brands try to maintain price differentials by effectively prohibiting you from landing on their US site and purchasing for international shipment. Take Macys.com, for example. Visitors from UK ISPs are immediately thrown into the UK-facing site of the famous New York department store. It promises Brits that we can “Enjoy £7 flat fee shipping with purchases of £65 more.” Great, I’ll have two pairs of Levi 501s, then, just $49.99 each – or much lower than the price in the UK. Except that a message then flashes up: “This brand is unavailable for international shipping”.
Sites such as MyUS.com help you sidestep this problem, giving you a US address to send the goods to. They then airfreight it using the likes of FedEx or UPS to your home address. But that’s the first in a series of costs that make this particular game start to unravel. A Microsoft Surface tablet weighs around 2lb, not including packaging, and international delivery starts at around $45 – so that’s £30 of the saving lost already.
But the big beast in your way is HM Revenue & Customs, and the small matter of duty and VAT.
British residents can import only £135 worth of goods bought online without having to pay customs duties, as HMRC always sternly points out (although they’ll waive it if the tax is below £9). So what is the duty on goods bought from the US? Unfortunately, you almost need an A-level in Trade Tariff Studies to navigate your way through this particular maze. The Surface Pro, I think, comes under “Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof” in the subset “Automated data processing machines”, but I’m not completely sure. If I’m right, the duty is actually 0%. If you’re buying Levi jeans, my guess is that they are in “Trousers, bib and brace overalls, breeches and shorts” and attract duty of 12%.
Then there’s the VAT. This applies to the entire sum – the price of the item, plus the shipping and the additional duty – at a rate of 20% on most goods. So that £623 Surface Pro becomes £784 once the shipping and VAT is added. Given the fact that you are going to have to wait longer for delivery, and are in a bit of a pickle if you need to return it for whatever reason, then it starts looking rather less attractive.
Yet I have a colleague who buys all his clothes from the US this way. It’s not about price for him, but about the selection, the quality and the fit. Feel free to shop on US sites on Cyber Monday – but watch those savings shrivel once you bring them across the pond.
