Buy a tech treat from abroad
The salesman in my local PC World was emphatic: “We’re sold out.” Apart from the not-for-sale units on display at the back of the store, he tells me, the Apple iPad is nowhere to be found. But no matter. “They’re cheaper in the States. That’s where I’ll get mine.”
The advantages to buying abroad are clear: you could pay less, you can get the latest gizmos ahead of the rest of the pack and, with the net revolutionising home shopping, there’s little practical difference between buying a new mobile phone in Carlisle or California.
There’s little practical difference between buying a new mobile phone in Carlisle or California
But what are the rules for consumers bringing in tech treats from abroad? Is computing equipment free from duty tax, and do you have to pay VAT on something when you may have already paid tax elsewhere?
In this feature, we’re going to examine the real-world consequences of buying tech from abroad, and help you decide whether those tempting foreign prices really are the bargain they first appear.
The British tech tax
That British consumers are at a disadvantage when it comes to buying technology is beyond doubt. Comparing the pre-tax price of identical products is sure to leave you with a bitter taste in your mouth.
For instance, the Apple iPad costs $499 (£338) in the US. Buy one in the UK and, with VAT removed, it will cost £365. With the strong dollar, that’s a relatively paltry difference of £27. But the average sales tax in the US is around 8%, 9.5% less than in the UK. The difference will become even more significant if, as predicted, VAT rises to 20%.
The difference is starker elsewhere. Adobe – well known for its disparate approach to pricing in the UK and the US – charges $699 (£473) for Photoshop CS5. On its British site, that somehow equates to £548, a difference of £75.
Even if there were no price difference, British techies are frequently kept from the most interesting products of the day. The iPad was launched in the US on 3 April; the British launch was initially slated for the end of the same month. But, caught out by demand for the tablet, Apple infuriated British buyers by delaying the release date by a month so it could fulfil orders in its homeland.
Apple isn’t the only company that holds back its best from this country. Microsoft’s well-received Zune player has never been offered for sale in the UK. The almost universally loved Chumby, the Linux-powered internet device, was available in the US for almost a year before it launched in the UK in April 2009.
And the much-vaunted Sony VAIO P Series, a diminutive laptop PC Pro called “stunning” when it was reviewed, was available at a significantly higher specification in its native Japan than in the UK. Japanese buyers could revel in the system’s 2.13GHz CPU; British buyers were left with a less powerful system with a 1.6GHz processor.
Why the disparity? Douglas Krone is the CEO of Dynamism, an American company that sells rare or unavailable products from Asia to western consumers. He says differing approaches to technology in international markets leads manufacturers to release different products. In the west, “the focus is first of all on price point. So the thought process is, ‘okay, we need this device to be £399, so what we need to do to get it on the shelf at that price point?’”
“When you’re designing a product for Japan, it’s a different psychology,” he explained. Instead of price, the emphasis is on the specification.