Exchanging a watch while visiting UK

[lawyerdude]

Has anyone ever been on vacation or business in the UK (from outside the UK) and saw a watch you wanted and did an exchange of your current watch? Would you have import issues if you did as no one declares and pays VAT on personal items when coming to visit?

[AEC]

Originally Posted by lawyerdude

Has anyone ever been on vacation or business in the UK (from outside the UK) and saw a watch you wanted and did an exchange of your current watch? Would you have import issues if you did as no one declares and pays VAT on personal items when coming to visit?

Interesting question. I would think the obligation to report importation of goods would be on the dealer accepting the watch in trade. Just a guess.

[charger_vital]

Originally Posted by lawyerdude

Has anyone ever been on vacation or business in the UK (from outside the UK) and saw a watch you wanted and did an exchange of your current watch? Would you have import issues if you did as no one declares and pays VAT on personal items when coming to visit?

My non-legal take:

First off, the buyer typically bears the responsibility for import duties (if any) once the goods reach the destination country, not the seller. Nevertheless, if you show up to a dealer in the UK willing to make a deal for a watch you have on your person, I fail to see how this triggers an import duty for the dealer as long as he had a good faith belief that the watch is yours and has no reason to believe that it was in his country under color of nefarious activity...

If there would be any duties charged to you, 2% would appear to be the damage assuming the watch is for personal use or to be given as a gift. https://www.gov.uk/guidance/simplifi...ds-into-the-uk.

If this is of concern, Lawyerdude, perhaps you might consider preparing a contract with the dealer for a steep discount on the new watch and a very modest trade in value for your watch as a means to get you to your desired outcome. It looks like in a "bad" scenario you would pay 2% on the value of your watch, which at a modest rate, would not be so bad. My uneducated guess is that it would be quite an administrative burden for a rank-and-file bureaucrat to determine the dynamics of consideration under the terms of the deal.

Of course, I would personally defer to the dealer on this. They probably already know the answer.

[Russell996]

Originally Posted by lawyerdude

Has anyone ever been on vacation or business in the UK (from outside the UK) and saw a watch you wanted and did an exchange of your current watch? Would you have import issues if you did as no one declares and pays VAT on personal items when coming to visit?

The dealer will likely ask you for proof of UK VAT/import Duty paid in the UK (if it is being sold in the UK then it is being imported unlike if you are simply visiting on vacation). For example if you fill out the form on Watchfinder to sell/trade a watch they will ask about proof of where the piece was purchased and if the watch is an import etc. I assume the responsibility is on the dealer though as you can't personally declare the piece as being imported unless at the point of entering the UK you are certain the trade will go ahead. No idea how naked pieces would be treated since no papers exist, I assume they simply slip through the net (as do most trades I'm sure)

[IGY]

No: I am pretty sure that this would represent a problem and not be cost effective for you. If you are part exchanging for a UK watch, your preowned watch purchased from outside the UK then VAT will need to be paid on the full used value of the watch, so an extra 20%. (So much higher than you might be used to in the USA depending on which state you live in the North East).

Not only that, but a couple of years ago the UK Inland Revenue stopped the tourist refund scheme that enabled non-UK residents to claim the 20% sales tax back on export of the watch outside the UK. So you'd have to pay VAT on both watches!

Sorry. (Someone needs to pay for all the things that the government keeps spending money on).

Pretty sure about this as I recently asked Watchfinder for a valuation on a watch that I am wanting to sell. One of their questions was if UK VAT had been paid on the watch and moreover they asked to see proof of purchase with VAT clearly marked. So a) they wanted to know the watch was not stolen, b) unlikely to be a replica and c) no additional VAT costs on their end if they bought the watch.

[Calatrava r]

I do not think the exchange has anything to do with returning to the US, if you are. Customs just asks you to declare the "value" not what you paid. An exchange would help you on any state sales tax owed as that amount is usually computed only any money actually paid for the item, not the exchange value. The VAT paid is usually refunded if you leave the EU with the item within the guidelines.

[IGY]

A FYI on the last comment:

1) The UK is not in the EU. (Not since 2020). It has it's own rules on sales tax and treatment of tourists making purchases in the UK.

2) Even within the EU, different EU member states have some latitude in setting their sales tax rates. And each member state has different rules on sales tax refunds for tourists.

3) The UK has gone from being a very generous tourist shopping destination within the region of Europe to one of the least favourable. The luxury watch dealers in London are not very happy about this and have tried lobbying the government for a change back to the old rules. However the country is skint and the political climate is not one in which politicians or voters are going to shed any tears for luxury goods shops. (Even if this is short sighted as the tourist expenditure will just shift to alternatives like Paris).

4) A used watch, originally bought by a US citizen, brought into the UK and sold / part exchanged to a UK watch dealer will need to have UK VAT paid in the UK before being resold to a UK customer. The used dealer needs to mark up the full retail price by 20% to reflect this out of pocket additional expense. Meaning effectively 20% less value to you in the part exchange. This is the case even if the watch has had US sales tax paid on it: does not matter.

5) Your new watch, purchased from the UK will have 20% UK VAT included in the quoted price (not added after on the sticker price like in the USA). However on export to the USA you will not be able to claim a refund of a single pound of that VAT. And in theory you might be liable to import fees into the USA. So it would be a double wammy.