VATRESNI3100 - How the scheme works: The standard method for VATRESNI

This involves the following steps:

  1. The retailer checks that the traveller is an entitled customer, the the goods are eligible for sale under the scheme, and that they will be exported by the due date. The retailer also obtains evidence of the traveller's destination. In prectice the presumption will be that the goods moved to Great Britain unless the evidence shows otherwise. If the destination is GB, or the traveller will be travelling via GB, the retailer must explain the special rules and decide whether to continue with a VATRESNI sale.
  2. The traveller and retailer complete a VAT retail export scheme form 407(NI) (or compliant variation).
  3. At this point the supply is taxable at the appropriate UK rate, VAT is charged and output tax is accounted for by the retailer.
  4. At the final exit point (from Northern Ireland or the EU) the traveller presents the goods and VAT refund documentation to a Customs officer, or alternatively deposits the document in a designated drop box.
  5. Upon verification, Customs certifies the VAT refund document and hands it to the traveller, who is responsible for mailing the form to the retailer using the envelope provided.
  6. Where a drop box is utilised, Customs will forward the certified document directly to the retailer using the supplied envelope.
  7. Upon receipt of the certified document, the retailer processes the VAT refund to the traveller.
  8. If the traveller's destination was Great Britain, the retailer accounts for the import VAT due, which offsets the VAT refund and means that payment will not actually be made.
  9. After refunding the VAT, the retailer's output tax may be adjusted to zero-rate the exported goods.

Please note that travellers are responsible for ensuring the following:

  • The VAT refund document is submitted to Customs for verification, with the certified form subsequently returned to the retailer; or
  • The document is placed in a drop box for certification, with an appropriately addressed envelope to facilitate its return by Customs if required.