Apple shoved its prices up in the UK by as much as a quarter, sound system maker Sonos followed, and now Microsoft is raising the price of some its laptops by up to £400, all blaming the Brexit-inspired fall in sterling. So is it time for bargain-hungry Brits to head abroad to snap up cheaper prices?
Fortunately, the internet allows us to go browsing for prices before schleping down the Rue de Rivoli, Gran Via or Fifth Avenue.
Sure enough, when I price-checked the Microsoft Surface Pro 4 (128GB) it was £749 in the UK but just $699 in the US, or £558 at current exchange rates.
Then I looked at the Apple iPhone 7 Plus, retailing at $869 (£694) in New York but £819 in London. So, yes, at first glance you’ll save 15% to 25% in the US (if you are one of the tiny number of people who can afford weekend breaks to Manhattan).
Now let’s compare prices between Britain and Europe. That Microsoft Surface Pro 4 is €999 in France – or £850 at current exchange rates. The Apple iPhone 7 is a stonking €1,019 at the Apple store in Paris – that’s £867, or fully 25% more than at its store on Fifth Avenue. The French are being far more ripped-off than us.
But while we may convince ourselves that we can pay for a holiday across the Atlantic by buying stuff cheaply, the reality is rather different.
First, the prices on most US websites exclude sales tax, which varies from state to state. In New York, it is 8.875%. So that iPhone 7 becomes $945, or £755 – only £64 cheaper than London. In Chicago, combined sales tax is over 10% – and you can’t reclaim sales taxes at airports.
Then there’s the awkward question of bringing stuff back to the UK. Anything brought in from the US (or indeed any country outside the EU) may be subject to VAT, customs and excise duty, unless they’re below £15 in value (£39 if they’re a gift). VAT on bringing in an iPhone from the US is 20%, although customs duty (as far as I can tell from HMRC’s site) is zero. Suddenly, that iPhone that looked cheap in New York is more expensive than buying it in London.
Of course, you can try fiddling your tax. You could take the iPhone out of its packaging and pretend it’s your UK mobile. Or sling the MacBook Pro into a laptop bag. But you’ll be breaking the law and exposing yourself to a potential criminal record. If you get a shipping company to send it over, it still goes through customs, so that’s not a way around it. Warranties are another question. If you buy from an Apple store in the US, you can take it back to the London store if it fails within the warranty period. Other retailers will be less accommodating.
Finally, there’s the question of true exchange rates. All the figures above I calculated using “pure” rates you find by using sites such as xe.com. What you actually get when you pay on a card – and are hit by a mark-up of around 3% at least – is another matter. The boring truth is that for high-end electricals, no matter how much you finagle it, it’s still better to buy at home rather than the US or Europe. It’s why Oxford St is packed with shoppers from abroad, because Britain is the world’s bargain basement for most things after sterling’s fall.
We did, however, find one exception – clothes rather than electricals. Spain is home to Zara, now the world’s biggest clothing retailer, and its domestic prices appear lower than anywhere else. I picked a “detachable vest coat” (item 6861/402) as it’s the first thing that popped up under men’s clothing on its site. In the US, it is $199 (£159). In the UK it is £119. In Germany it is €129 (£110), but in Spain it is just €99.95 or £85.
It won’t pay for your holiday, but popping into Zara in Malaga or Barcelona, if that’s your thing, will be worth it.
Quite what happens to duties after we leave the EU, though, is another, much bigger, story.
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