but that discount might be down to tax avoidance
THESE DAYS, THE best price for a gadget
can be only a click away. Google even helps by
listing promoted suppliers at the top of your
search results – but when some retailers offer
goods for 30% to 40% less than others, is the
deal too good to be true? Not necessarily.
Welcome to the complex area of grey imports.
Grey importing is when products are sold
outside normal sales channels. The sale itself
is legal, but the goods are often shipped from
outside the final market, raising issues of tax,
duties, warranties and returns. The practice
also enables you to buy products that have
never been launched in this country, such as
the Nokia N1 tablet (see page 28).
So how can you spot a grey importer? The
presence of a UK phone number on a website
is no guarantee that the firm is based here.
Many such sites operate from Hong Kong,
and if you buy from one of these, your usual
consumer rights won’t apply, so check
customer reviews before buying.
A good source of ratings is Trustpilot,
which is like TripAdvisor for retailers. Most of
the reviews you’ll find on this site are glowing.
If a site isn’t mentioned on Trustpilot or found
in Google-sponsored results, it might be a
scam – you can verify this by searching for
the name plus “review” or “problem”.
COMMON COMPLAINTS
Unfortunately, not all resellers provide a good
service. Many buyers of camera kit report
receiving lenses or bodies that have been split
from kits and then repackaged, for example,
reducing their second-hand value. There have
been reports of inaccurate photos and orders,
while ‘in stock’ can be an elastic term. A wait
of five or six days is usual, but there are
stories of items not showing up for a month.
SLRHut’s customers noted that the firm
phoned them before processing their online
order, and while some appreciated the
personal touch, others objected to being
offered alternative products.
Don’t expect to receive stock from the UK
– goods may come from China, Russia or
anywhere outside Europe. Whether this
matters depends on the manufacturer.
According to several users, Olympus, for
example, will honour an international warranty
based on any valid receipt, while lens-maker
Sigma is opposed to grey imports. Apple
reportedly doesn’t care where a product was
bought, but make sure you watch out for
technical differences, such as PAL versus
NTSC or different power-supply requirements.
Since you’re not buying your goods within
the EU, you don’t get a two-year guarantee as
standard either. Grey importers usually offer
their own warranty bought in from an
international provider. If you need to claim
against it, you’ll have to send your product to
a third-party workshop.
Buying goods on the international
wholesale market and offering them direct to
UK customers isn’t illegal (although it may
involve a breach of contract somewhere), but
in today’s global market, it’s not obvious why
that should make them cheaper. Retailers
such as Cam2 and Tin Cheung advertise the
same prices online as in their Hong Kong
shops, and you’ll rarely find them for less than
the pre-VAT price in the UK. Yet much lower
prices are advertised for UK imports.
PAYING VAT
Presumably, UK suppliers know where to go
for the best wholesale deals, so might grey
imports involve an element of tax evasion?
When goods are shipped from outside the EU
to a personal customer, a tax bill is sent –
usually through the courier firm – to the
supplier (if they’ve agreed to pay it) or to the
customer. A known method of VAT evasion is
to mark packages with a value below the £15
threshold rather than the real price paid.
We’re not suggesting that any of the
companies named here are involved in this
practice, but plenty of customer stories are
doing the rounds. One affirmed that his
supplier had failed to “do an accurate customs
declaration, to dodge the VAT. My camera was
declared as a low-value toy accessory.” The
gamble doesn’t always pay off: “I’ve since
ordered a camera from another Hong Kong
firm, which was delivered after being held by
customs for seven weeks. I’ve paid the VAT
and hope to be refunded [by the supplier].”
The Home Office’s Border Force is
responsible for customs enforcement. A
spokesperson told us that the agency aims to
“disrupt any fraud that cheats UK taxpayers
and undercuts honest businesses”, and that it
carries out checks to “assess whether the
values on customs declarations are credible”.
Border Force will also “respond to any specific
intelligence about the suspected
undervaluation of goods”.
Some grey suppliers promise a refund if
you receive a tax bill. That’s highly suggestive
that there might be some attempted
misdeclaration, although it could occur due to
error. Others just state that you won’t have to
pay any tax but don’t explain why. Simply
Electronics is unusual in disclaiming
responsibility for tax and duty, correctly
warning that the customer may have to pay it.
We phoned several grey-importing
companies for details. Twice we reached
automated messages. A third supplier, based
in England but under a name listed by
Companies House as “dormant”, answered.
After four attempts to track down an elusive
manager, we gave up. Finally, at Expedite
Electronics, a woman with a professional
telephone manner answered our questions.
Did the prices include VAT? No, because “the
main company” was based in Hong Kong. Did
that mean we might get a VAT bill? No: “You
don’t have to pay any VAT and the import
duty and tax is already included.”
If companies bring goods from outside the
EU into UK warehouses and sell them on,
they’re responsible for the VAT, not the
customer. If the goods are shipped directly to
you from abroad, however, you’re probably
liable to pay the VAT on receipt. One problem
is that there’s no easy way for a consumer to
check that the tax has been paid.
GREY ADVICE
If you’re thinking of buying grey, go in with
your eyes open. First, do the research. We
found many items for hundreds of pounds
less than UK prices, but a few were cheaper in
the UK. Read the terms and conditions, which
are often on a page called FAQ or Shipping.
These range from explicit – requiring you to
return faulty goods within a limited period, for
example – to the unnerving, such as when
‘shipping insurance’ is an extra cost.
Make sure you pay by credit card, because
then the card issuer is jointly liable for
purchases of more than £100, no matter
where it’s from. Some debit cards offer
voluntary protection too. You can request a
chargeback against any card if goods aren’t
delivered, but you’ll be relying on the
cooperation of the merchant’s bank, so don’t
hold your breath for a quick resolution.
If things go wrong with a purchase, badger
the retailer until it has been put right. Insist
on a replacement or refund, not a repair – if
goods arrive faulty, cite breach of contract, a
concept understood by courts everywhere. If
necessary, log in to Trustpilot and post a
complaint: many of these companies monitor
reviews and they may reply. At worst you’re
warning others of the pitfalls.
Other ways to buy abroad
Grey imports are not the same as
personal imports. Many foreign retailers
offer delivery to the UK, leaving you to
pay the VAT and duty. Reputable New
York company B&H (www.bhphotovideo.
com), for example, usefully shows a
calculation of shipping, tax and duty
while you’re browsing an item. Foreign
eBay sales usually work in a similar way,
but misdeclaration is not unknown.
A few UK-based firms, such as HDEW
Cameras, sell grey imports. With low
prices backed by the reassurance of
English law, this could offer the best of
both worlds, although some users have
said the company could be clearer about
what you’re getting, including kit splits.
One legal way to avoid some of the
tax is to bring products with you when
travelling to the UK from outside the EU.
If the goods are worth more than £390 in
total, you must go through the red
channel and pay VAT and duty on the
rest of the value.
