V4.305 Retail exports

Introduction

Prior to 1 January 2021, the retail exports scheme provided for the zero-rating of supplies of goods sold by VAT registered retailers to entitled persons for personal use and exported as accompanied baggage. As explained below, the scheme was abolished in Great Britain but is still available, as a result of the Northern Ireland Protocol, in Northern Ireland. Details of the scheme are therefore described in full.

Abolition of the retail export scheme in Great Britain

In the 2013 Budget, it was announced1 that the Government would consult on options for re-designing the retail export scheme with a view to making the scheme easier to use and understand, reducing the scope for error, improving compliance, protecting revenue and representing good value for the taxpayer. The consultation was carried out in 2013 and a summary of responses published2. It was anticipated at the time that basic improvements to the scheme would be introduced in 2014 and HMRC suggested that there were no plans to either introduce civil penalties or a minimum threshold. There were also proposals to introduce a digital scheme in the longer term.

In April 2014 it was announced3 that changes would be announced before Summer 2014, with some changes being delayed until October 2014. However, HMRC announced later that year 4 that it would be holding a 'market engagement event' to develop 'requirements for a digital system and gain a better understanding of supplier capabilities and interest in helping to develop and fund a solution.' No

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