VAT Retail Export Scheme (Northern Ireland)

VATRESNI2600 - Basic principles of the scheme: VATRESNI in conjunction with other schemes

Retail schemes

VAT retail export scheme sales made under the standard method (see VATRESNI3100) should be treated as a normal retail scheme sale under the method being operated.  The VAT adjustment being made in the VAT account.

Retailers operating the direct reclaim system (see VATRESNI3200) are making business to business supplies to the refund agent for which a VAT invoice is issued. If the transaction itself is recorded as though it were a normal retail sale to the customer and the consideration included in the DGT then it can be treated as a retail scheme supply.

Second–hand schemes

The VAT retail export scheme may be used in conjunction with the second-hand margin scheme. In these circumstances, the VAT refunded will be the VAT on the margin and not on the whole value.

However, the VAT retail export scheme cannot 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 Notice704 – Retail Export Scheme (Northern Ireland), paragraph 8.3.

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 407(NI)s 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 the 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(NI), 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.