Originally Posted by Gold77

If you find me a Rolex at Mappin & Webb for £1000 I will happily pay the VAT

I thought there was no VAT rebate intra-EU anyway? I presume the retailers that still give the VAT discount for an EU flight in fact DO subsidise the watch. Those who do, do it in the knowledge their prices in the UK are higher than in Europe anyway.

Incidentally, NEVER pay the full advertised price for a watch at any shop. Every shop will at least give you 5%, if not 10%+. That's half your VAT reclaimed already!