Personal exports - retail exports: Assurance at the retailer: Lack of internal checks by retailer
Returned goodsAlways check to see what system the trader has in place to identify and deal with returned goods originally sold under VAT retail export scheme.
Fraud can occur where an entitled person buys goods, completes a VAT refund document, and then returns the goods to the retailer to obtain a credit or refund of the VAT inclusive cost of the goods. If they are allowed to retain the completed VAT refund document, this may be certified with a false UK or EC customs stamp and returned to the retailer or refund company to obtain a further refund of the VAT. A variant on this is that the goods are produced to customs at the point of departure and the refund form stamped, but the goods are then diverted, remain in the UK, and returned to the store for a full refund after the traveller has already received a VAT refund.
Ensure that, as a minimum, where VAT refund documents are issued to customers, the retailer indicates this on the sales invoice / till receipt, for example with a stamp indicating “VAT Refund”. Also, any VAT refund document issued must be cancelled if a credit note for the goods is issued or cash refund made.