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HMRC internal manual

VAT Personal Exports: Retail Exports

HM Revenue & Customs
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Personal exports - retail exports: Basic principles of the scheme: The VAT retail export scheme in conjunction with other schemes

Retail schemes

The VAT retail export scheme can be used alongside other retail schemes when the sale is made using the standard method (see VATRES3050). Retailers operating the direct reclaim system (see VATRES3100) may treat business-to-business sales under VAT retail export scheme as minor non-retail sales within their retail scheme method.

Second–hand schemes

The VAT retail export scheme may be used in conjunction with the second hand margin scheme (see VAT Notice 718for details). In these circumstances, the VAT refunded will be the VAT on the margin and not on the whole value. VAT retail export scheme cannot, however, be used in conjunction with global accounting.

Antique dealers and similar retailers operating second hand schemes are often reluctant to show VAT on the VAT refund document, as the figure would provide a means of discovering their profit margin. Retailers selling goods under any of the second-hand schemes may adapt a VAT refund document as set out in Notice 704.

Concession shops

Many larger stores operate concessions for other retailers within their own stores, where one counter or area sells goods from another retailer’s range. Where the takings are rung through the main store’s tills and subsequently adjusted out, it is acceptable for a VAT retail export scheme form to be issued by the host shop (typically at the main customer service desk). The host shop will refund the VAT by reducing their own output tax. However, where a concession operates its own tills and issues receipts in its own right showing its own name and VAT number, any VAT 407s relating to these purchases must be issued by the concession, and not the host shop.

Tax-Free Shopping Scheme (TFSS)

This scheme is similar to that for VAT retail export scheme, but operates for the recovery of customs duty in respect of goods originally entered by the retailer to inward processing. The scheme uses the VAT 407, and the procedures follow those in place for VAT retail export scheme. Further information on TFSS may be obtained by contacting the IPR Unit of Expertise.