It's Christmas time (yes it is) and everyone's shopping in New York

How to make big savings in the Big Apple even as you decry the ludicrously early start of the high-street festive season
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The Independent Online

We may be enjoying an Indian summer, but don't be fooled: it's time for Christmas shopping.

Next week John Lewis will launch its festive range, while supermarkets such as Sainsbury's have already filled their shelves with Yuletide wrapping paper and cards.

But they've all been slow off the mark: Harrods opened its Christmas store on 8 August.

While some might throw up their hands in disgust at such commercialism, it seems that many more of us are warming to the idea of flying to New York to shop for seasonal gifts. For despite the recent alleged plot to blow up transatlantic airliners, it is expected that thousands of Britons will head to the US for some retail therapy over the next two months.

Many will combine a short overseas break with favourable currency values - the dollar is currently around $1.89 to the pound - to make big savings on their Christmas shopping. They will also benefit from cheaper flights, with most most airlines travelling between London and New York trying hard to fill their planes. A return flight to New York this month can be purchased for £200 to £250 - around half the cost at the height of summer, says a spokesman at US carrier Continental Airlines.

British shoppers aren't just after a slice of the Big Apple: more and more are being tempted by warehouses full of cut-price designer products only a 45-minute bus ride from the heart of Manhattan.

The big favourite is Woodbury Common. Here, at knock-down dollar prices, you can choose from designer ends of lines, last season's items and even a small selection of some of this season's styles.

Factor in the favourable exchange rate and there are some big savings to be made (although watch out for duty, see the box above). For example, Armani shoes that would usually set you back at least $300 (£160) cost around $100; a Gucci "Cherry" handbag for $660 is $259; Ralph Lauren jeans are down from $69 to $20; and DKNY T-shirts are less than a third of the price at $9.

If you're on a spree and buying in bulk, huge savings like these can more than offset the cost of flying and accommodation.

However, with the dollar so low and fierce competition between retailers in New York's showcase shopping avenues, you don't have to go to factory-outlet stores to get a bargain.

Visit the department stores and big chains on Fifth Avenue, Madison and Lexington and you'll see that the US can offer much more value than the UK. For example, a pair of £45 jeans in Gap on a British high street is nearly £20 cheaper in New York. And an iPod Video 30GB priced at £184 in the Apple store on Regent Street will set you back the equivalent of £128 in the Big Apple.

But before you start seeing dollar signs and reach for your passport, there are plenty of costs to add to your bill. After your flight, the most obvious one is for accommodation - you can save here by staying in a hostel, many of which are clean, friendly and central. For a list, try www.hostels. com or www.hostelworld. com. Prices start at $25 for a bed in a dormitory, or $29 for a private room.

For those shoppers new to America, the sales tax added on to the price of your purchase at the cash till can come as a shock.

This tax can vary between locations. In Manhattan, you'll fork out a hefty 8.4 per cent each time you approach the counter; travel a few miles to White Plains, a shopping suburb of the Big Apple, and the sales tax falls to 5 per cent. Unless armed with a calculator and a detailed knowledge of local tax rates, you won't know exactly how much to expect to pay until you get to the till.

How you pay for your goods can also affect the cost. Use nearly any credit card and a handling fee of up to 2.75 per cent will be added. Nationwide's card is the exception to this.

And bear in mind that if you go wild in the shops, there'll be extra costs incurred on the flight back if your baggage is over the weight restrictions.

British Airways allows one standard-sized bag and one briefcase or computer carrier on board its planes.

For checked-in luggage, you can have two suitcases weighing no more than 32kg (70lb) each. Any more than that and you could incur a £60 surcharge, though this depends on how full the flight is.

Hard landing: taxes await at the airport

Apart from alcohol, cigarette and perfume allowances, any goods brought into the UK from a non-EU country are subject to duty - and, probably, VAT - if they cost more than £145.

This applies whether it's just one item costing this amount or a number of different products that, when added together, are worth more than £145.

Duty varies according to the goods and is paid on the whole value - not just the difference between your items and the threshold.

For example, a purse could incur duty of 3 to 9.7 per cent, while an MP3 player attracts a 10 per cent charge.

Whether you pay VAT will also depend on the type of product purchased. For example, books are VAT-free but you will be hit with 7 per cent for a camera lens.

To find out how much you might have to pay for your shopping, check HM Revenue & Customs website: www.hmrc.gov.uk.

Of course, many travellers simply take their purchases out of the box, lose the price tag and bring them in with their other luggage. Though common, this is illegal: if caught, says Customs, you would be forced to pay the duty and VAT and possibly a fine if you have brought in a large number of items.

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