GORDON BROWN put himself forward yesterday as the transatlantic shoppers’ friend by calling on Europe to raise the limit on tax-free imports from America far above its present level of £145.
The Chancellor said that the limit was out of date and meant that thousands of shoppers faced duty and VAT on purchases such as iPods and golf clubs bought for bargain prices in the US. The Times understands that the Treasury wants the duty-free level to rise to £800. But Mr Brown will have a battle on his hands. The tax-free allowance is set by the European Union and can be changed only by a unanimous vote of all 25 member states.
Mr Brown said that he had written to the European Commission to call for a rise in the duty-free limit, which has not been reviewed since it was set in 1994. A DVD player costing £150 in the US today would be liable to 14 per cent duty and VAT at 17.5 per cent, bringing the total to just over £200.
Treasury officials believe that the level should be much more realistic — enough to buy an Apple iPod (US price £161 compared with £219 in London), a suit or a set of golf clubs without extra costs.
The £58 saving on an iPod bought in the US looks a lot less appealing when Customs officers in Britain slap on duty of 2 per cent and VAT, bringing the total to £189.55 and reducing the discount to only £29.45.
Duty rates vary widely on goods bought abroad and can land the British shopper with a hefty extra charge, especially as the £145 allowance cannot be shared among fellow travellers, which would allow a couple to escape duty on, for instance, a £200 handbag. A bag that price bought outside the EU would burden the purchaser with duty of up to 9.7 per cent, plus VAT, making the total price £257.80.
A £400 set of golf clubs from in the US attracts 2.7 per cent duty and VAT at 17.5 per cent, making the total £482.69.
A £500 television set bought outside the EU attracts 14 per cent in duty before VAT, bringing the final bill to £669.75.
More than 870,000 Britons flew to New York from London last year, and for nine out of ten, shopping was one of the main reasons for their trips.
Mr Brown told the Commons: “The limit on the value of purchases from outside the EU brought back through customs, duty and tax-free, has been set by the European Union at £145 — excluding alcohol, tobacco and perfume.
“I have written today to the European Commission, and other member states, stating that this limit was last reviewed in 1994, is out of date, and that we should now raise it.”
The perils of shopping outside the EU were demonstrated in October when Colleen McLoughlin, the girlfriend of footballer Wayne Rooney, was handed a bill estimated at more than £3,000 at Manchester airport. She had just returned from a shopping trip to New York with at least £15,000 of jewellery and gifts. A Customs officer said at the time: “The girl is only a teenager and full of naivety, but there are still laws in this country about coming back in with bagfuls of expensive goodies which cost considerably less in the US.”
Although visitors to America find that pounds go further because of the weakness of the dollar, Customs and Excise warned them against going on a Christmas shopping spree while the EU still ponders Mr Brown’s request.
He added that a different set of duties applies to goods bought from outside the EU over the internet and would not be affected by any change to the £145 limit for goods brought back personally.
No charges apply to goods bought for personal use within the EU, where tax was paid in the country of purchase.
looks painful ..ooohhhhh