What is VAT?

Value added tax (VAT) is a consumption tax levied in the European Union (EU). It is paid by the consumer of a product or service and can be considered analogous to sales tax (although merchants are legally required to include VAT in the price). The VAT in Scotland, England, Wales, and Northern Ireland is 20%; in the Republic of Ireland, the VAT for most goods is 21%.

The VAT on any portion of your trip cost (e.g., green fees, hotels, vehicle rental) is included in the trip price. Although tourists are not entitled to receive a refund for the tax applied to these services, you may be able to obtain a refund of the VAT paid for goods purchased while you are visiting. A minimum purchase of £30 is required in the UK; no minimum is required in the Republic of Ireland.

An accessible, easily comprehensible discussion regarding VAT refunds is available at:http://www.ricksteves.com/plan/tips/vat.htm

The information that follows has been obtained from:http://www.hmrc.gov.uk/vat/sectors/consumers/overseas-visitors.htm

If you are an overseas visitor, to qualify for a VAT refund you must:

  • live outside the EU
  • leave the UK for a destination outside the EU with the goods you have bought by the end of the third month after the month when you bought them
  • show customs officials the goods, your receipts for them, and a completed VAT refund document when you leave the EU

You can obtain VAT refunds for anything on which you pay VAT in the UK apart from the following:

  • new or used cars
  • a boat you plan to sail outside the EU
  • goods worth more than £600 exported for business purposes
  • goods to be exported as freight
  • goods that need an export license – except antiques
  • unmounted gemstones
  • bullion over 125g, 2.75 troy ounces or ten Tolas
  • mail order goods, including Internet sales
  • goods used or partly used in the EU, such as perfume
  • service charges, such as hotel expenses

How to get your VAT refund

When you purchase the goods

First, you need to choose a shop that operates the VAT Retail Export Scheme. It is voluntary and not all shops operate it, so you must check before you buy anything.

To obtain your VAT refund, you need one of the following documents. The shop will give you this:

  • a VAT 407 form
  • a shop or refund company’s own version of form VAT 407 and a stamped pre-addressed envelope
  • a VAT Retail Export Scheme sales invoice

You need to fill in the form when you make your purchases, in front of the retailer. The retailer will ask to see evidence that you are eligible to use the scheme (such as your passport).

You also need to agree with the retailer how your refund will be paid. Some retailers will pay you the refund directly, others will operate through a refund company, and some will have an arrangement with a refund booth at the point where you leave the UK.

When you leave the country

If you’re traveling outside the EU , you must show your goods and your refund form to UK customs staff at the airport you’re leaving from. Make sure you arrive at the airport early so that you have plenty of time to deal with the customs staff before your departure.

If you’re traveling to another country within the EU before you finally leave the EU , then you must show your goods and refund form to customs officials in that country when you leave it.

If you are leaving the EU on a flight that stops in another EU country before leaving the EU , then you have two options:

  • if you’re taking your goods as hand baggage, then you must show them to customs officials along with your refund form in the last EU country you stop in before leaving the EU
  • if you’re checking your goods in as hold baggage, then you must show your goods and your refund form to UK customs officials before checking in

If there aren’t any customs officials at the airport you’re leaving from, there will be a telephone you can use to ring an official or a clearly marked customs post box in which you can leave your refund form. Customs officials will collect it from there and if they are satisfied that all requirements have been met, they will contact the retailer to arrange your VAT refund.

Once your form has been approved by customs officials, you can then obtain your refund in the way you agreed with the retailer when you made the purchase. You will use one of these methods:

  • mail the form back to the retailer to arrange payment of the refund
  • mail the form back to a commercial refund company to arrange payment of the refund
  • hand your form to a refund booth to get paid immediately

You may not get all of the VAT back. The retailer and/or the refund company may make a charge to cover the cost of handling your form. If they do, this will be deducted from your refund before you receive it.