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Duty Free Watches - Heathrow - is it a con?

edited 30 November -1 at 1:00AM in Shop but don't drop
3 replies 15.4K views
DutyfreehunterDutyfreehunter Forumite
2 posts
edited 30 November -1 at 1:00AM in Shop but don't drop
Ive been looking at a very special one-off gift for my wife when we travel soon to outside the EU.. and have set my sights on a new Rolex from Watches of Switzerland Heathrow..

which i would understand to be tax free. (the shop still gets their full price-the 20% VAT-goes to the Gov)
Now VAT is 20% so if I were to spend ( for example) £10,000 on a watch.. I would expect to only pay £8000 .

However.. when I asked on the telephone about prices.. I was told that I had to devide the price by 1.2 to get the duty free price. which equates to only £8333 or 16.5% discount ! £333 more !... the man seemed to be trying to blind me with figures..

so I would like to know... is the shop trying to have me over? surely 20% added to a product... and then removed.. does not equate to a 16.5% off?? I know how to do maths.. so my question is
if a product like a luxury watch is advertised as duty free... can i compell them to give me 20% off?
I only fly once a year..and its a milestone birthday ... and my choices once airside at the airport are limited... in the UK there would be no discount.. so is the shop trying to keep the £333 for themselves 3.5%..
anyone had any experience of sharp practices at heathrow ( apart from the recent press abut charging VAT on papers and water and the shop keeping it) (and in case you think i'm rich... im not!! it is a gift to be bought from my small pension pot as I have just retired)

DFH

Replies

  • edited 20 February 2017 at 10:07AM
    dlusmandlusman Forumite
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    edited 20 February 2017 at 10:07AM
    I know how to do maths.

    You appear not to know how VAT or percentages work

    You do not take off 20% from the incVAT price to get the exVat price . You add 20% to the exVAT price to get the incVAT ( i.e the VAT payable on something costing 10,000 IS NOT 2,000 )

    in your example
    if the exVAT price was 8,000 the incVAT price would be 8,000 +20% = 8,000+1,600 = 9,600

    an exVAT price of 8,333 gives an incVAT price of 8,333 +20% = 8,333 + 1666.6 = 9,999.60
  • edited 20 February 2017 at 10:25AM
    dlusmandlusman Forumite
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    edited 20 February 2017 at 10:25AM
    So you can work out the ExVat price using the formula

    ExVat + 20% ExVat = IncVat

    1.2 * ExVat = IncVat

    ExVat = IncVat / 1.2

    The shop is actually giving you a better deal - they are offering an extra 33p discount than is necessary ( since 10,000 / 1.2 = 8333.33333)
  • Thank you for your reply... i need to go back to school i think.... ! It makes sense now... Kudos dlusman.

    DFH
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