Please explain the VAT tax

[mattR]

Not planning on buying anything large but a bunch of small purchases at say 25 pounds each still add up to 300-400 pounds/euros so if I got back 16% of that it would be nice. Was hoping you could just clump receipts together but sounds like the actual retailer has to fill out a form so can't see that happening at a souvenir shop for a couple of t-shirts.

[mamkmm2]

I've also been told there is a minimum purchase amount before many places will bother filling out the VAT 407 ... somewhere in the neighborhood of 50 to 75 pounds and variable by area.

[Host Bonjour]

Do you just collect all your receipts from everything from eating out to buying t-shirts to admission fees and claim a total for all these items or is it only good for expensive purchases? Can you only claim receipted for item bought in England if you are departing from Gatwick or can you claim items bought in France/Spain and Italy as well?

 

No...in general, you'll still be paying the VAT as you would be paying Sales Tax on purchases at home...generally unavoidable :eek: BUT, to encourage some shopping/trade/tourism and especially perhaps items produced within the country, a tax exemption is made provisionally for items purchased that are equal to a certain required minimum amount spent...the amount spent varies per country. I linked a chart above in my previous post in this thread and other members also linked helpful articles further explaining the VAT details.

 

Amounts spent on food/accommodations/souvenirs are typically NOT subject to refunds. Want a Savile Row suit or Phillip Treacy fascinator? Those items would likely entitle the buyer to a VAT refund upon departing the UK if returning to one's home country. A Union Jack hat or shirt - not so much ;)

[SteveH2508]

No there are many VAT exempt products, basic food stuffs, children's clothes,books and magazines are just some examples. But it is a complex issue there is no VAT on meat and potatoes if you buy them for home use, but once they are cooked in a restaurant as a meal then VAT is charged.

 

The most famous case if probably the one of Jaffa Cakes, a popular baked product, if they were classed as luxury biscuits then they should have been VAT rated but if they were truly cakes then they were exempt. It took cases in the highest court of the land to settle that one.

 

<pedant warning on>

The highlighted statement is incorrect. The items you mentioned are subject to VAT but are zero-rated. The distinction is important if you are a VAT registered trader. VAT exempt supplies means the trader cannot reclaim any input tax relating to those items. If the item is zero-rated then the trader can reclaim the input tax.

 

An example would be a kids clothes manufacturer - they pay VAT on the cloth they buy, but they can reclaim that VAT when they turn that cloth into kids clothes. They do not collect any actual VAT on their sales (zero-rated) so they are net reclaimers of VAT from HMRC.

<pedant warning off>

[GrJ Berkshire]

There will be no way of reclaiming VAT from Camden market or similar locations, my understanding is that its mainly luxury goods like watches, jewellery, or designer labels it applies to or cameras ,computer equipment with a minimum price, as a Brit not sure but thought £50 per item. T-shirt type or souvenirs do not count and its not a totting up of several £20 items. Best is from large specialist shops, chain, dept stores who advertise this like M&S or John Lewis, Harrods etc, in small towns or off the tourist track eg Southampton may be very hard to do.

[Cotswold Eagle]

There is no legal minimum amount of spend - it is set by the retailer or the third party operator they use, such as Global Blue, Innova, Tax Free Worldwide etc. - at least some of them offer refunds on £20 or £25 purchases.

[tring]

$30 is not more than £20.

 

I did not know any specific rules about tax free shopping in Britain, but if you buy expensive souvenirs like the sweaters sold in Norway and The Faroes, then tourist shops advertise tax free shopping. We have bought items in Switzerland in the past, when we have been able to re claim tax. So this may be a European or worldwide thing, but I am also of the understanding that the shop has to offer this facility as mentioned by others.

 

If the tax is marked as to be added in the US I would see no problem with that and we have visited a few US ports and not had problems, so that could be the case. In Canada there was no mention on the price tag that tax would be added or any indication of what that tax would be. I have a brother in Canada who said that method has been considered for possible change (perhaps just in certain parts of Canada), but as yet the original stance remains.

[Thejuggler]

Very interesting and informative, thank you to all who posted. One more complicated question - what happens when you are leaving by ship rather than by air? Our ship cruises the British Isles, then goes to Denmark, Norway, Iceland, then ends in New York. Is there any way we could get VAT refunds - if so, where?

 

Norway. There should be a customs official on board at your last Norwegian port of call. They will pay out there and then.

 

Iceland we filled the forms out and posted it with receipts from Reykjavik and Akureyri in a postbox at the cruise terminal in Akureyri. Refund took about a month. Use one envelope for all receipts as each envelope attracts a service charge payment.

[Globaliser]

Very interesting and informative, thank you to all who posted. One more complicated question - what happens when you are leaving by ship rather than by air? Our ship cruises the British Isles, then goes to Denmark, Norway, Iceland, then ends in New York. Is there any way we could get VAT refunds - if so, where?

Norway. There should be a customs official on board at your last Norwegian port of call. They will pay out there and then.

Why Norway? From first principles, I would have thought that Denmark would be the appropriate place, as that is the last EU port of call before the ship leaves the EU.

[GrJ Berkshire]

There is some wrong information here. None of Norway, Switzerland and the Faeroe islands are in the EU , so it may do tax free shopping but its not VAT, so this would not get a refund to non EU citizens.

You must get this processed before leaving the EU at the last port/ airport.

For info I of Man, Jersey, Guernsey, the Azores, Madeira are the same, not in the EU although affiliated to EU states- UK and Portugal.