The brand-new iPhone X was unveiled earlier this week with an eye-watering starting price of £1,000 – yet it’s much cheaper overseas. But can it really be cheaper to fly long-haul to get one? We’ve crunched the numbers…
Every time a new iPhone’s launched, tech-lovers across the country are immediately irked by how much more it costs to buy in the UK.
Now, buying Apple’s latest gadget is never going to be MoneySaving, but the difference was particularly marked this time, with the basic model iPhone X costing £999 here but only $999 – or about £740 – in the US. Cue a flurry of news articles, blog posts and tweets claiming it could be cheaper to fly overseas to buy one – even factoring in the cost of the flight.
While this may sound far-fetched, it’s the kind of claim we at MoneySavingExpert.com can’t resist, so we thought we’d give it a go. Is it REALLY possible to fly overseas, buy the phone and fly back – and still have cash to spare?
A quick disclaimer: there are a huge number of possible ways you can do this – and this isn’t an exhaustive piece of research. But we’ve given it our best shot – and if you can find a better way to do it, let us know in the comments below.
Where to buy it cheapest
Let’s start with where it’s cheapest to buy the iPhone X, based on Apple’s upfront prices. We checked a few likely destinations, which came out as follows:
Where’s it cheapest to buy the iPhone X contract-free?
|Country||iPhone X 64GB||iPhone X 256GB|
|USA||£737 ($999) excl tax||£848 ($1,149) excl tax|
|Japan||£748 (¥112,800) excl tax||£861 (¥129,800) excl tax|
|Canada||£801 (CA $1,319)||£929 (CA $1,529)|
|Exchange rates as of 15 Sep 2017|
Given that Canada and Japan are more expensive in terms of the iPhone X and also for flights, it looks like we’re going to the US of A.
Finding the cheapest flight
Here’s where it starts to get complicated. Flight prices are hugely variable, and much depends on when you book and when you fly. So to keep things simple we’ll look at flying to the US for the day of the iPhone X’s release – Friday 3 November.
Crucially, we need a flight that gets us there for 3 November and then returns as soon as possible, to avoid any possible savings being eaten into by accommodation and other expenses.
Here are the cheapest return flights we can find that meet that criteria – all of which, it should be said, are pretty decent fares for a transatlantic trip.
Flight costs to the USA
|Wow Air||Gatwick – Newark||2 Nov 2017||Newark – Gatwick||3 Nov 2017||£252|
|Norwegian||Gatwick – JFK||2 Nov 2017||JFK – Gatwick||3 Nov 2017||£295|
|Icelandair||Gatwick – JFK||3 Nov 2017||JFK – Gatwick||4 Nov 2017||£335|
|Prices as of 15 Sep 2017|
Wow Air’s the clear winner – though we’re sceptical about how many seats are available. We initially couldn’t find these cheap seats and they only appeared after we approached Wow Air. It told us the first set of cheap seats had probably sold out, and that more cheap seats had been added on those dates in response to the interest in them.
Nevertheless, this fare IS available at the time of writing – it just may not be for long.
Factoring in US sales tax
So, let’s do the sums here. The total cost of a 256GB iPhone X in the US plus the cheapest flight there on the release date is £1,099 – that’s £50 less than the phone costs in the UK. Plus you get to spend 25 hours and 10 minutes in Newark, New Jersey. Winning.
However… we haven’t yet factored in sales tax, which stands at 7% in New Jersey. Unfortunately that pushes the cost of the phone in Newark up to $1,229, and adding in the flight as well that means the trip will cost £1,156 – turning your £50 saving into a £7 loss. Sad face.
Do you have to pay the US sales tax?
In the US, sales tax is added when you buy goods and services, similar to how prices in the UK include VAT, so you’ve no choice but to pay it. But the sales tax rate is set by states themselves, not the federal government, so it differs from state to state.
In some states – Delaware, Montana, New Hampshire and Oregon – sales tax is 0%. (In some parts of the US you may pay additional local taxes, but not in those states.) Which means if you can find a way to buy your iPhone X there, you can pay no sales tax and retain your saving.
This is where it got complicated (and we spent a lot of time on Google Maps this afternoon…). We thought of two options (if you can think of a better way, again, let us know in the comments).
- Option 1 – Travel to a state that has 0% sales tax. Delaware is by far the closest to Newark Airport. However, a return bus ticket to Wilmington, Delaware, where the nearest Apple Store is, will cost you from $33 (£25), reducing your £50 saving to a mere £25.
- Option 2 – Get the phone shipped to Newark. The second, easier option would be to get the Apple Store at the Christiana Mall in Delaware to ship your iPhone to Newark Airport.
The only catch is we couldn’t find evidence that Newark Airport has a facility which allows you to pick up parcels. Oh, and there’s also the small matter of whether Apple Christiana Mall would agree to accept an order over the phone and ship it – it seems reasonable to assume you’d simply be referred to the Apple website, in which case you’ll likely pay Californian sales tax of 7.25%. Gah.
Will I have to pay duty on it when I fly back to the UK?
Short answer? Yes – and unfortunately that’s the final nail in the coffin for the whole crazy fly-to-the-US-for-an-iPhone idea.
You see, even if you flew to Newark, got the bus to Wilmington, ate no food at all and ended up with a £25 saving, there’s still the fact that you’d have to pay duty and tax on goods you bring into the UK from non-EU countries.
Every time a new iPhone is announced, you’ll see a lot of people claiming you don’t have to pay to bring one into the UK from outside the EU as long as it’s for personal use or a gift. This would be true if the iPhone X fell within the duty-free allowance for other goods, but that allowance is £390 – and sadly, that’s not even close to covering a new iPhone these days.
HM Revenue & Customs says that on goods worth between £391 and £630 you have to pay customs duty of 2.5% on their total value. Above £630, call the VAT, Customs & Excise Helpline for guidance. We did – and were told for an iPhone X it would still likely be 2.5%, so based on the US price, an extra £21.
That still leaves you with a notional £4 saving… but on top of customs duty, you’ll also need to pay import VAT – and that’s the usual 20%, or a whopping £170 on top.
So… even if you buy the highest-spec iPhone X, find the very cheapest flight, are willing to take a cross-state bus ride to Wilmington, Delaware, kill hours at Newark Airport and spend absolutely nothing on food, drink or entertainment for the duration, by our calculations you’re STILL going to spend £166 more than you would getting the phone back to Blighty.
And if you’re tempted to try to smuggle your iPhone X into the UK, consider this – customs can search you and your luggage for anything that should be declared. If they discover your iPhone X, it could be seized.
Already in the US? The numbers MAY add up
Of course if you’re travelling to the US anyway, the figures look very different. It may well be worth trying to buy your new iPhone while you’re over there, and even after paying duty and VAT you’re likely to save – by our calculations with the 256GB iPhone X there’s a potential £110 gain. There are a whole host of things to watch out for though – your warranty, consumer rights, compatibility of chargers and so on.
As for the idea of a transatlantic shopping trip? Well, even if we could make the numbers work, in practice it would be a MoneySaving mission more quixotic than MSE Jordon’s flight home from Sheffield to Essex via Berlin.