Shopping
There are some subtle differences between the two sides of the Atlantic when it comes to shopping. There are some very unsubtle differences too! These are the things we have noticed.
Subjects in this section, which is updated every now and then, are:
In the UK there is a beastie called Value Added Tax (VAT). This is the equivalent of the US sales tax and it is levied on most consumer items at a rate of 17.5%. Yes, for any US reader that isn’t a typo, VAT is seventeen and a half percent. Some items, such as children’s clothes and books have a zero VAT rate. Other items, such as domestic fuels, have lower VAT rates. But in general the UK consumer is paying 17.5% sales tax on high street purchases.
In the US sales tax varies by state but in general is around 5-6%.
A key difference is that all prices in the US are shown pre-tax. Buy a CD marked as $7.99 in a 6% sales tax state you’ll pay $8.47 at the checkout. Buy the same CD, marked at £7.99, in the UK, and you’ll pay £7.99 at the checkout as UK consumer prices are shown including the tax element.
(The fact that the same CD will cost $7.99 in the US and £7.99 in the UK is the subject of a separate page on comparative pricing.)
There is very little argument, in the UK, for VAT to be lowered. Any debate on the Government income generated by VAT are more likely to be around how the Government spends the revenue rather than the level of the tax.
So if you are moving to the US be aware that the price shown on the item is not going to be the price you pay, and if you are moving to the UK be prepared for higher ticket prices but the price on the ticket is exactly what you’ll be asked for at the checkout.
