The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
The Government announced (see Abolition of retail export scheme in Great Britain) on 11 September 2020 that the retail export scheme would be abolished in Great Britain (but not Northern Ireland) with effect from 1 January 2021. From that date, therefore, the arrangements described below will only be relevant to travellers leaving the UK via Northern Ireland.
This guidance note provides an overview of the zero-rated provisions applicable to goods sold by VAT registered retailers to eligible people resident outside of the UK for personal use and exported as accompanied baggage. In particular, it sets out the conditions that must be complied with by retailers and customers entitled to use the VAT retail export scheme. The VAT retail export scheme provides overseas visitors coming to the UK with the opportunity to receive a refund of VAT paid on goods they buy in shops, as long as the goods are exported to destinations outside the EU.
The onus is on the retailer to ensure that export evidence is held to support zero-rating of the goods. If this evidence is missing or unacceptable, then HMRC will treat the goods as being supplied in the UK and the retailer will be issued with an assessment for the VAT under-declared plus interest and a penalty if applicable.
In order to qualify to use the scheme, the overseas customer must leave the UK for a final destination outside the EU (with the goods in question) by the last day of the third month following that in which the goods were purchased.
The retail export scheme is optional for a retailer. However, it gives two main advantages:
reduced prices for eligible customers who can buy goods on a VAT free basis may make more expensive items attractive to overseas visitors
customer satisfaction ― the business may attract more overseas customers if it adopts the retail export scheme
See Example 1.
HMRC do not set a minimum sales value for goods supplied under this scheme, however,
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
The substantial shareholding exemption (SSE) provides a complete exemption from the liability to corporation tax on the gains generated from qualifying disposals of shares and interests in shares by qualifying companies. Conversely, if losses are generated by the disposal and the SSE conditions are
The rent-a-room scheme was introduced in the early 1990s to encourage homeowners to take in lodgers.Fundamentally, the rent-a-room scheme is a relief which means that the rent received by an individual from a lodger (up to a prescribed limit) can be exempt from income tax. If the gross rents are
Employee benefit trusts (EBTs) are commonly used to support employees’ share schemes and to provide other benefits to employees in the form of pensions and bonuses.Their use has been significantly affected by the introduction of the disguised remuneration rules. Although the statutory exclusions
Business asset disposal relief (previously known as entrepreneurs’ relief) is a capital gains tax (CGT) relief that allows business owners with chargeable gains on qualifying business assets to pay CGT at a rate of 10%. For disposals made on or after 11 March 2020, the relief is available on up to
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.