The government has announced the withdrawal of the VAT Retail Export Scheme (RES) from non-EU visitors and no extension to EU visitors. It was part of several policy modifications following ‘A consultation on duty-free and tax-free goods carried by passengers’.

The government reviewed the excise duty and VAT treatment of goods purchased by individuals for their own use and carried across borders in their luggage. 

As part of several changes to duty-free allowances, the Treasury plans to withdraw the VAT RES for non-EU visitors after the end of the Brexit transition period and beginning 1 January 2021. Retailers will be able to continue to offer VAT-free shopping to non-EU visitors who purchase items in-store and have them sent directly to their overseas addresses. 

Under the current VAT RES rules, visitors from beyond the EU bloc could claim a refund on the VAT on items bought in the UK and taken home. The report concluded that: 

The consultation also laid out new rates for allowances for goods coming into the UK including a significant increase to the current allowance levels for alcohol for all passengers.

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‘A consultation on duty-free and tax-free goods carried by passengers’