VAT Retail Export Scheme (Northern Ireland)

VATRESNI8700 - Handling correspondence: Complaints that refund not paid - goods imported to GB

Below provides a draft letter that may be sent to a traveller when the refund has been not been paid because the goods were imported into Great Britain.

Dear [insert name],

VAT Retail Export Scheme

Thank you for your letter of [insert date] concerning non-receipt of a refund of VAT from [insert name of retailer] on goods purchased by way of the retail export scheme. 

HM Revenue and Customs set the conditions which must be met by retailers who operate the scheme, but are not responsible for refunding the VAT. The refund (amount, method of repayment etc) is a commercial transaction between you and the retailer, agreed at the time of purchase. 

The reason given for not refunding the VAT was that you travelled directly to Great Britain from Northern Ireland (or via an EU member state). There are no personal allowances for goods imported into Great Britain in this way.

Goods brought to Great Britain are imports and VAT should be paid on import but, as UK VAT has already been charged by the Northern Ireland retailer no further action is normally required.

However, if you make a Retail Export Scheme claim you will need to also pay the import VAT on arriving into Great Britain. To simplify the process the original retailer, on receipt of your stamped VAT407(NI) will account for your import VAT at the same time as processing your claim.

As both amounts will be the same no actual refund will be given.

For this reason, retailers may not offer the Retail Export Scheme to overseas visitors intending to travel to Great Britain.

I hope you find this information useful. VAT notice 704/1, Claim VAT back on tax-free shopping in Northern Ireland, which can be found on the Gov.UK website, explains the retail export scheme in more detail.

 

Yours sincerely,