UK to scrap VAT refunds

Tuesday 22 September 2020

Islanders will no longer be able to have VAT removed from items they buy in UK stores unless Jersey shoppers pay for them to be shipped home.

The changes were announced as part of the UK Treasury's reform of duty-free and tax-free sales.

Currently, Jersey shoppers in the UK can claim back the VAT on certain product and stores, such as retail outlets, by showing the shop staff their passports and filling in a form. 

Pictured: Jersey travellers will no longer be able to reclaim VAT on purchases and then bring the goods back in their luggage. 

University students can do the same, providing they are due to return to Jersey within three months of the purchase. However, that will change from 1 January 2021. 

"As part of these changes, VAT refunds for overseas visitors in British shops will be removed," said a spokesperson for the UK Government.

"Overseas visitors will still be able to buy items VAT-free in store and have them sent direct to their overseas addresses, while the costly system of claiming VAT refunds on items they take home in their luggage will be ended."

How this will work in practice remains to be seen, given that many retailers do not ship to the Channel Islands. Even if they do, the obligation to have them posted home will eat into the money reclaimed through the VAT deduction.

Pictured top: Selfridges Department Store in London.