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End of tax free shopping in UK

24 September 2020

Newsletters and Updates

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The UK government announced the end of the VAT Retail Export Scheme (VAT RES) for non-EU visitors and tourists to the UK from 1 January 2021.

This scheme, commonly marketed as “Tax free shopping” allows retailers to refund VAT charged and paid by UK visitors, once they receive documents to confirm the export of the goods to a place outside the EU.  The visitor must purchase the goods in person and remove them from the UK in hand luggage.  The scheme is typically used by department stores and jewellery retailers, especially in London and Edinburgh.

A group of UK retailers has requested a review of the decision, noting that the UK will be the only European country that will not offer a VAT free shopping scheme for international tourists.  The scheme is estimated to make retail sales of £ 3.5 billion a year.

Also the UK confirmed that the duty free allowances currently available for travellers arriving from the EU from 1 January 2021 will match the current non-EU allowances.  Currently travellers from the EU can bring in unlimited goods for their own personal consumption, although there are indicative limits, above which Customs will ask for evidence they are for personal use.

Travellers arriving from the EU will therefore see their allowances fall from 800 to 200 cigarettes, from 110 to 16 litres of beer, from 90 to 4 litres of wine and from 10 litres to 1 litre spirits, amongst others.  Additional amounts should be declared in the red channel on arrival at the UK port or airport and customs duty, excise duty and VAT paid.

If you have any questions, please contact the VAT team.