Mini-Budget: VAT on retail exports
As of 17/10/22, Chancellor Jeremy Hunt has announced new budget plans. As part of those plans, the VAT-free shopping scheme has been scrapped. To view our latest budget information, click here.
The Government has announced that it will introduce a modern, digital, VAT-free shopping scheme with the aim of providing a boost to the high street and creating jobs in the retail and tourism sectors. A consultation will be issued shortly which will gather views on the approach and design of the scheme. This new VAT-free shopping scheme for non-UK visitors to Great Britain will enable them to obtain a VAT refund on goods bought in the high street, airports and other departure points and exported from the UK in their personal baggage.
We expect this to be similar to the Retail Export Scheme which operated up until 31 December 2020. This allowed non-EU residents to claim a refund of VAT on retail sales when taken home in their luggage. The system was laborious requiring forms to be stamped at point of exit and returned to the retailer but was popular amongst tourists. One might hope the new scheme will make the process simpler.
It isn’t necessarily a completely tax-free solution to visitors as domestic tax may be due on the country of the shopper (as would be the case in the UK) but it would encourage sales in the UK.
Further information on this will follow. In the meantime, if you have any VAT queries, please get in touch.
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