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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 shopping concession

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 RES
  • VAT refund agents
  • airport shops
  • visitors to the UK


Tax free shopping (extra statutory concession 9.1)

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This concession will be withdrawn with effect from 1 January 2021 throughout the UK.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 This scheme will be withdrawn in Great Britain.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 Ireland Protocol.


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.

Visitors leaving the UK after 31 December 2020 with purchases made before that date

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 Notice 704/1.

Passengers 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 country.

Further information can be found in the NI Guidance Policy paper and in Notice 704 (for retailers) and Public Notice 704/1 (for customers).

About the Author

© Crown Copyright 2020.

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Article Published/Sorted/Amended on Scopulus 2020-12-11 22:53:54 in Tax Articles

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