VAT free shopping for international visitors not to be reinstated

Retailers will be disappointed and frustrated by today’s announcement reversing the decision to reinstate VAT free shopping for international visitors in Great Britain.

Budget 2020 announced the abolition of VAT free shopping for international visitors. Under the previous VAT Retail Export Scheme (VAT RES), it was possible for international visitors to seek a refund of VAT paid on goods purchased in the UK, as long as the goods were not being consumed in the UK. As part of the UK’s departure from the EU, these rules were removed with effect from 31 December 2020. At that time there were estimates given of sales of circa £3.5 billion (per year) of VAT free sales to tourists. Many retailers were concerned the loss of the VAT relief would have a detrimental impact on tourist hotspots, as well as shopping villages such as Bicester Village in Oxfordshire.

In September 2022, the government had said that the VAT free shopping scheme for international visitors would be reinstated in Great Britain, in a new digital format, with the aim of boosting the high street and encouraging more international visitors.

Today that decision was reversed, meaning that the current position remains in force, with no specific VAT reliefs available to overseas visitors purchasing goods from bricks and mortar based UK retailers.

For further information or to discuss how we can help you, please contact Robert Marchant or your usual Crowe contact.