VAT Retail Export Scheme
The VAT Retail Export Scheme or Tax-Free Shopping scheme allows individuals not resident in the EU to obtain a VAT refund on goods bought in the UK and taken out of the EU. The scheme does not apply to services, for example hotel bills.
HMRC has been reviewing the scheme since Budget 2013 with a view to developing a digital based scheme. HMRC is now inviting businesses interested in developing a digital solution to register for a market engagement event which HMRC will host later this month. The event will be used to help HMRC develop their requirements for a digital system and gain a better understanding of supplier capabilities and interest in helping to develop and fund a solution.
There are a number of conditions that must be met in order to claim the VAT back including the requirement to leave the EU within three months of making a purchase from a participating retailer. A special form (VAT 407) must be completed and this must be presented with the goods and receipts to customs when leaving the UK.