For visitors to the UK it may be possible to reclaim VAT paid when purchasing goods in the UK. There are rules and regulations that need to adhered to ensure a successful application, if the correct procedure is not followed it will result in the refund not being given.
Our guide to VAT refunds for UK visitors tells you more on what VAT is, why you would want to reclaim it, who can and who cannot reclaim it, the correct procedure for reclaiming the VAT and useful resources.
VAT Refunds for Overseas Visitors
What is VAT & Why Claim it Back?
Visitors That Can Claim
Which Goods Can You Reclaim Funds On?
Procedure When You Purchase Goods
Procedure When You Leave the Country
What is VAT & Why Claim it Back?
VAT stands for Value Added Tax (sometimes referred to as a Goods and Services Tax, GST) it is a consumption tax added on to goods and services. Currently the standard VAT rate is 20% that means 20% is the amount added to the price in purchases and the amount that can be reclaimed by those that are eligible to apply. The current 20% rate came in to effect on 4th January, 2011. Goods purchased with VAT included add 20% to the cost meaning visitors can benefit from reclaiming this amount back if they are entitled to do so.
Visitors That Can Claim
For those visitors that live outside of the European Union (EU) they are able to claim if:
Are deemed as overseas visitors, i.e. they are not domiciled in the EU.
They live outside of the EU.
They leave the UK for a destination that is not inside the EU with the goods they bought. This needs to be done by the end of the third month after the month when the goods were bought. Most tourists and visitors on short holidays & business trips would be fine with the time limit, it would rule out visitors that stay longer in the UK.
They show officials at customs the goods they bought, the receipts for the goods along with a completed VAT refund document when they leave the EU.
For visitors that live inside the EU they are able to claim if:
They are planning to leave the EU for at least 12 months.
They leave the UK for a destination that is not inside the EU with the goods they bought. This needs to be done by the end of the third month after the month when the goods were bought.
They remain outside the EU for at least 12 months
They show officials at customs the goods they bought, the receipts for the goods along with a completed VAT refund document when they leave the EU.
Which Goods Can You Reclaim Funds On?
The goods that visitors can reclaim funds on include all the goods purchases on which VAT was paid for in the UK. It should be noted that there are some exceptions where there are no refunds available. Some of the goods not currently eligible for refunds include:
Cars - new and used.
Goods worth more than £600 exported for the purposes of business.
Gemstones that are unmounted
Mail order goods including Internet sales
Service charges i.e. hotel expenses, restaurants.
For a full list please see HM Revenue & Customs - VAT Refunds for further information on the VAT refund scheme.
Procedure When You Purchase Goods
The VAT Retail Export Scheme is a programme that includes shops that operate within the refund scheme, visitors should check first and be careful in shopping in shops that are members of this voluntary scheme. It is easy to forget to check and purchase goods in shops not part of the scheme, check with your hotel &/or holiday/travel provider for more information on which shops they know are covered and where you can find shops in the scheme that sell the goods you wish to purchase.
In order for visitors to obtain the VAT refund, ensure you have one of the following documents that the shop operating in the VAT Retail Export Scheme will give:
- A VAT 407 form
- A version of form VAT 407 from the shop or refund company
- A VAT Retail Export Scheme sales invoice
The form needs to be completed when you making the purchases, in front of the retailer. The retailer will ask you to produce evidence that you are eligible to use the scheme, i.e. as your passport.
It is important that you come to an agreement on how the refund will be paid, some retailers pay themselves directly whilst others use the services of a refund company. There are some companies that also have arrangements where you can reclaim at a refund booth as you leave the UK.
It is possible you may not get the full amount of the VAT back to yourself. There may be a handling charge from the retailer or the refund company, this usually taken out of the total amount you are due back.
Procedure When You Leave the Country
For visitors that are travelling outside the EU, they must show their goods and the refund form to UK customs staff at the airport that they are leaving from. In case this takes some time it is wise to ensure you arrive at the airport early to have enough time for this.
Once the form is approved by customs officials, the refund can be obtained in on of the 3 ways you may have agreed with the retailer namely:
1. To post the form back to the retailer for payment of the refund
2. To post the form back to a commercial refund company so they can arrange payment of your refund.
3. To hand your form to a refund booth, the advantage of this is you get paid immediately meaning do delays and no chance of the posted forms going missing.
The information contained in the VAT refunds for UK visitors guide is intended to give travellers and visitors to the UK further information on the VAT refund possible and the correct way of claiming, the information has been given in good faith and to the best of our knowledge at the time. Due to the nature of taxation and VAT, it is recommended that you check on the HM Customs & Revenue website for the latest rules and procedure. In this area there can be frequent changes in rules and regulations and procedures that need to be followed, thus it is wise to check first to ensure you adhere with the requirements and avoid doing anything that may invalidate your refund.
Disclaimer: The information given in on this website is given in good faith and to the best of our knowledge. If there are any discrepancies in no way do we intend to mislead. Important travel details and arrangements should be confirmed and verified with the relevant authorities.
