Tax warning for bargain hunters in New York

Britons are being tempted to visit America, particularly New York, to look for pre-Christmas bargains due to the pound’s strength against the dollar.

However, a spokesperson for HM Revenue and Customs (HMRC) said if you are going on a holiday then you will probably get some bargains while you are over there but it is a very expensive place to fly to and stay. The spokesperson added that they are not trying to deter people from going but New York can be quite costly.

The value of the pound has rocketed recently to levels not seen 1981, making US prices even lower compared to those for the same products in the UK.

There are cheap flights to New York in the press (some available for as little as £250) so many are under the impression that they will break even on a shopping trip to New York. Furthermore, there is no doubting that most items are significantly cheaper across the atlantic such as:

A Sony 32″ LCD Hi-Definition TV costing $999.99 (£483.23) in New York would cost £699 in the UK making a saving of £215.77. Also, a JVC High-Definition camcorder costs $1099.99 (£531.66) in the US would equate to £799.89 in the UK, a saving of £268.23.

Finally, a Canon digital camera (EOS Rebel Digital XTi) from New York costs around $4647.95 (£313.94) compared to £445 here in the UK, a saving of £131.06.

Next month, a 3-night stay for 2 people in a basic Manhattan hotel costs at least £1,000 on www.expedia.co.uk. UK shoppers would have to spend an excessive amount to get anywhere near breaking even.

Furthermore, shoppers have to declare any goods over the amount of £145 to Customs officials on return to the UK. Above this limit you will have to pay import duties at 20% on many items, including gifts and souvenirs. In addition, VAT at 17.5% will be added to items that are liable to VAT in the UK.

The HMRC have a National Advice Service helpline (0845 010 9000) for advice on determining duty rates on various products as calculating how much tax you will pay on purchases isn’t easy. Further rules can be complicated as digital cameras, which don’t record moving images, are not subject to duty tax.