British passengers travelling to and from EU countries will be able to continue to take advantage of duty-free shopping from January 2021, it has been revealed.
But tax-free sales of goods such as electronics and clothing for passengers travelling to non-EU countries and the VAT Retail Export Scheme will be discontinued.
The changes come after a consultation with industry on the UK’s new approach to taxing goods carried between borders ahead of the end of the Brexit transitional period.
According to HM Treasury, the new laws mean that passengers “will be able to buy duty-free alcohol and tobacco products, where available, in British ports, airports, and international train stations, and aboard ships, trains and planes”.
The amount of duty-free goods that passengers can carry back from non-EU and EU countries will also be “significantly increased” providing “one of the most generous allowances anywhere in the world”.
But tax-free purchases of electronic goods and clothing for passengers travelling to non-EU countries will be removed following concerns that the tax concession does not always benefit the consumer.
For example, the paper revealed that in some instances, tax-free goods were brought back into the country by UK residents, “putting high street retailers at a disadvantage”.
The VAT Retail Export Scheme will also be removed after consultation with the sector revealed that the system was far too costly and complex. Overseas visitors will, however, still be able to buy items VAT-free in-store and have them sent directly to their overseas address.
For more information on the tax changes, please click here.
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