A debate on tax-free shopping for international visitors is to be held in Westminster Hall on 7 September 2023 at 3pm. The subject has been chosen by the Backbench Business Committee, and the debate was requested by Sir Geoffrey Clifton-Brown. The debate will last 90 minutes.
Tax-free shopping for international visitors (252 KB , PDF)
Tax-free shopping is an arrangement whereby products bought but not consumed in the country of purchase are ultimately VAT-free (PDF). These schemes are usually employed by tourists, who buy goods that they will consume entirely in their country of origin.
Yes. The UK had implemented the VAT Retail Export Scheme (VAT RES – PDF) to comply with EU rules. It only applied to eligible goods bought by tourists residing outside of the EU. At the end of the Brexit transition period, the Government decided to withdraw the scheme on 1 January 2021.
Under the terms of the Northern Ireland Protocol, VAT RES is still in operation in Northern Ireland.
Sections of the retail industry reacted negatively to the withdrawal of VAT RES. Several retailers argued the scheme incentivised overseas spending and feared that retail spending could be displaced to other countries.
The Government, on the other hand, believed that the scheme was being implemented at a substantial cost. It added that the economic benefit of the scheme was unclear, and that it appeared to not benefit the whole of the UK equally.
The Daily Mail launched a campaign to re-instate a TFS scheme in 2023. As of August 2023, the campaign has around 350 signatories, including brands such as Harrods, Burberry, Marks & Spencer, and British Airways.
Tax-free shopping for international visitors (252 KB , PDF)
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