Back in January 2020, I wrote a post called Buy a Watch Abroad? Don’t Do It! I stand by the premise: the hassle, U.S. Customs duty and lack of dealer love received makes buying a luxury timekeeper abroad a bad idea. And then, recently, the UK pound tanked . . .
The exchange rate became so favorable to U.S. buyers that purchasing your watch in the U.K. looked mighty tempting. And then the Head of the Exchequer – the extravagantly-named Kwasi Kwarteng – announced that the UK would rebate the 20 percent VAT (Value Added Tax) to foreign shoppers.
Holy sh*t! What watch guy/gal/them can resist buying a high-priced timekeep at an 11 percent advantage (at the current exchange rate) for the almighty dollar and tax-free?
A Rolex purchase could “save” an American buyer over 30 percent! Enough to pay for a round-trip ticket to The Land of Hope and Glory and a nice pint of Guinness. What’s not to love?
A lot, actually.
As mentioned in the 2020 article, you’re legally obliged to pay customs duty when you bring you horological treasure stateside. The CPB charges a three percent import tax on the first $1000 beyond an $800 exemption. They charge 6.5% on any amount above the first grand.
That takes some of the bloom off a rose gold watch. If you fail to list your watch on your customs form . . .
The primary penalty a person will face when failing to disclose any item through the United States Customs and Border Protection is the seizure and loss of the property. This generally starts when clearing customs when arriving in the country if no declaration is made.hg.org
Heads-up! Wearing your brand new watch and sending the packaging home won’t fool experienced customs inspectors. Anyway, that proposed 20 percent VAT rebate to U.S. buyers? Gone.
You may have heard: the British Prime Minister was just ousted for her “radical” plan to let earners keep more of their own money (i.e., reducing taxes). The reinstatement of the VAT rebate – killed in January 2021 as part of Brexit – is off the cards.
Once again, still, say goodbye to a 20 percent surcharge at the point of purchase.
So all you’re left with is the favorable exchange rate. Oh and Rolex (and other watchmakers) raised their U.K. prices to discourage foreign bargain hunters.
If that isn’t discouraging enough, authorized dealers are just as out-of-stock on that side of the pond as they are here. Not to mention the hassles described in the first article.
So my advice stands: don’t do it. With pre-loved luxury watch prices sinking here, with the ongoing need to support your local watch dealer (for both your sakes), you’re better off buying from at home.
NB: The average VAT rate in the European Union is 21 percent.