Revenue and Customs Brief 21 (2020) withdrawal of the VAT Retail Export concession
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Published 11 December 2020
Withdrawal of the VAT Retail Export Scheme and the tax-free
Purpose of this brief
This brief confirms the withdrawal of “airside” tax-free
shopping in the UK and the withdrawal of the VAT Retail Export Scheme (VAT RES) from Great Britain
(England, Scotland and Wales) when the Transition Period comes to an
end on 31 December 2020.
Who needs to read this
You should read this brief if you are:
- retailers that offer VAT
- VAT refund agents
- airport shops
- visitors to the UK
The tax-free shopping extra statutory concession (ESC 9.1) is published in VAT Notice 48. It allows retailers of goods
sold in ports and airports to zero-rate sales to passengers departing
for non-EU destinations. ESC
9.1 allows the retailer to be regarded as exporters of those goods and
consequently zero rate the supply for VAT purposes.
This concession will be withdrawn with effect from 1 January 2021
throughout the UK.
VAT Retail Export Scheme (VAT RES)
VAT RES allows non-EU
visitors to the EU to recover the VAT on purchases they make on the
high street which they take home with them in their luggage. This
scheme will be withdrawn in Great Britain. Retailers in Northern
Ireland, including those at ports or airports, will continue to be able
to offer VAT RES to
non-EU visitors to Northern Ireland, under the terms of the Northern
The detailed rationale for these changes is included in the written
ministerial statement and summary of responses to the recent consultation on duty-free and tax-free goods
carried by passengers.
leaving the UK after 31 December 2020 with purchases made before that
Purchases made in Great Britain using VAT RES on or before 31
December remain eligible for refund under the terms and conditions that
applied when the purchase was made. Visitors should continue to lodge
their claims for these purchases when they leave the EU.
Further information can be found in Public
travelling from NI to non-EU destinations including Great Britain
The VAT RES scheme
will continue to be available in Northern Ireland.
There are special rules for goods purchased in Northern Ireland that
are taken to Great Britain and consequentially there are some
additional records that will need to be kept.
VAT RES forms for
sales made in Northern Ireland on or after 1 January 2021 will not be
stamped by Border Force in Great Britain. They must be presented to
Border Force on leaving Northern Ireland or the EU, for their home
Further information can be found in the NI
Guidance Policy paper and in Notice 704
(for retailers) and Public Notice 704/1
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Article Published/Sorted/Amended on Scopulus 2020-12-11 22:53:54 in Tax Articles