Duty Free Watches - Heathrow - is it a con?

Dutyfreehunter

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

dlusman

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

dlusman

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)

Dutyfreehunter

Thank you for your reply... i need to go back to school i think.... ! It makes sense now... Kudos dlusman.

DFH