British residents recovering VAT on goods purchased in EU
Residents of England, Scotland, and Wales can now claim back VAT on certain goods purchased in the EU, enabling them to save over 20%. These goods include fashion accessories, cosmetics, jewellery, tech devices, and some food and drink items.
How British residents can conduct tax-free shopping in EU
In order to be able to shop tax-free in the EU, British residents must be able to prove that they live in England, Scotland, or Wales, spend the appropriate minimum amount in any given EU country, and take the goods back home to Britain within three months of their purchase.
It is important to remember that any items for which a refund is being claimed, must not be used and must be in their original packaging.
Major policy changes for tourists shopping in the UK
On the flip side, as of January 1, 2021, for tourists from the EU purchasing goods in Britain, the UK has now ended tax-free shopping for goods such as electronics and clothing in airports. VAT refunds are also no longer being granted.
Data on the results of the new UK policy
To examine the consequences of this policy so far, ESW conducted a survey titled Global Voices: Pre-Peak Pulse 2021. The survey included 15,000 respondents throughout 14 countries. A total of 46% of luxury shoppers said that they would visit the UK less and spend less money shopping as a result of the end of tax-free shopping in the country. Some 43% of respondents also said that this would place the UK at a competitive disadvantage.
As can be seen just from the sphere of tax-free shopping alone, Brexit is potentially having quite an impact on people’s lives and the way business is being done, both in the UK and the EU. As these changes have only come quite recently, their long-term effects remain to be seen. We will be closely following the developments.
