If you’re travelling to the United Kingdom or the rest of Europe this summer remember to claim back the value added tax (VAT) on your shopping as you export the goods; it is estimated by vatfree.com that €8 billion (28.60bn Naira) is left unclaimed every year by oblivious tourists.
At London’s Heathrow Airport, a new VIP service was launched by Travelex last week to help speed up the cumbersome process by offering customers refunds by appointment.
What’s the VAT refund worth and is there a minimum spend?
In the UK, VAT is 20 per cent with a minimum spend of £30 (13,000 Naira) per receipt, per store. In France, VAT is 20 per cent but you need to spend €175 on each single receipt to qualify for a refund; in Italy, it is 22 per cent with a minimum spend of €155; and in Germany, it’s 19 per cent and €25. Switzerland, which is a non-EU country operating under different rules, has 8 per cent VAT with a minimum spend of CHF 300 (97959.51 Naira).
What shops offer VAT refunds?
Not all, so beware - look for the "Tax Free" sign as you enter. There are some 2,000 stores in the UK offering the service: big department stores and designer shops are very likely to, while little small-town stores or boutiques may not. Stores and outlets catering to tourists - like Selfridges, Harrods and Bicester Village - often have dedicated 24/7 areas for VAT refunds.
What is the process in the shop?
Ask at the till – you may have to go to a different till to pay if you also need to fill in VAT forms. Do not forget to take your passport with you when you shop: you will need this to prove you are not an EU resident. The form is generally known as the VAT 407 form. It is invalid without both your and the retailer’s signatures. This form can look quite different from store to store – often just a very long till receipt.
Is there any commission to pay?
Yes, and the fee will vary depending on the value of your shopping, the retailer’s fee and the tax refund agency fee from, say, Global Blue or Premier Tax Free. At Global Blue, a £350 spend would only get you a refund of £40.50 on VAT of £70. Joni de Vogel-Smeenk, the founder and chief executive of vatfree.com, says Global Blue can charge fees as high as 50 per cent of the VAT. Further fees will be charged for cash refunds too.
Any alternatives to paying a commission?
Vatfree.com, a peer-to-peer platform set up by the Booking.com founders, helps travellers use a mobile app to claim VAT back directly from stores, which can “easily reimburse” shoppers using the website’s tools. Fees are “less than half of what tax refund agencies charge”, says Ms de Vogel-Smeenk.
What is the process?
Don’t lose your paperwork (receipts or VAT forms). Forms and purchased items will need to be presented for inspection, new and unused. And remember - no customs stamp, no refund. If you sign up for a Global Blue card, forms are automatically completed by the agency.
Anything else to remember?
You must leave the UK by the last day of the third month after you made the purchase to receive a VAT refund – for instance, for a July purchase, you must take them out of the EU by October 31. And you should not have spent longer than 365 days in the EU over the past two years
How long should I expect to wait at the airport?
Travelex says the average waiting time at London Heathrow during peak periods can be around 40 minutes but a Friend told me she once waited two hours at Terminal 3 (from which Emirates flies) before giving up on the VAT refund altogether at the risk of missing the flight. Ms de Vogel-Smeenk says you should allow at least half an hour at all other EU airports.
Can I avoid the queue?
Travelex manages London Heathrow’s VAT refunds on behalf of customs and has a £10 fast-track service at all terminals and a new £120 personal appointment at the British Airways Terminal 5, with no waiting time. The appointment must occur within four hours of your flight departure time; if you are more than 15 minutes late it will be cancelled and your £120 refunded.
At any UK airport, if you have small items you can hand-carry, you can go to customs and have your VAT processed after security, avoiding the big queues at the front of the terminal before check-in for items that must go into checked-in luggage. You will need to do this for electronics, jewellery and watches over £250.
I’m visiting more than one EU country – how do I claim VAT?
Show your goods, till receipts and refund form for all your shopping from all countries to customs in the last EU country you visit.
How long will the refund take? What do I do if I don’t get my refund?
Her Majesty’s Revenue and customs (HMRC) simply says you should expect your refund within a ”reasonable time” and advises you to write to the shop – not HMRC – if that has not happened. Vatfree.com say they expect refunds from the shops within 40 business days.
What if there are no customs officials available?
You can file your paperwork and receipts in a special customs mailbox near the customs desk and they will be processed by customs for a refund, if everything is in order.
I’m a Briton living in Nigeria and visiting the UK on holiday. Can I claim my VAT back?
Yes. You are still a UK citizen but not a resident. You will need to show your passport and residency visa. The same goes for any other EU citizens who live and work in Nigeria and indeed, anyone who can prove they are living outside the EU for at least 12 months.
What about duty-free at UK airport stores?
Airport stores are no longer VAT-free and often only a little cheaper than the high street. In a row in 2015 it was discovered that showing boarding passes at UK airport shop tills allowed retailers to benefit from the VAT refunds without always passing savings on to passengers. The pharmacy Boots has recently announced that it will refund VAT for items over £5.
Can I get a VAT refund on my hotel bill?
No, you cannot get a refund on any service charges such as hotel stays or restaurant meals, only goods you are exporting.
What if I ship the goods?
Shipping goods will avoid VAT at the point of purchase – but your savings may be wiped out by shipping charges and the import duty you will pay in Nigeria, which is based on the value of the goods and averages 5 per cent.
What about online shopping?
Shopping online or by mail order does not count for VAT refunds; you have to have been in the shop at the time of purchase, although you don’t have to be the person who paid.
What’s the VAT refund worth and is there a minimum spend?
In the UK, VAT is 20 per cent with a minimum spend of £30 (13,000 Naira) per receipt, per store. In France, VAT is 20 per cent but you need to spend €175 on each single receipt to qualify for a refund; in Italy, it is 22 per cent with a minimum spend of €155; and in Germany, it’s 19 per cent and €25. Switzerland, which is a non-EU country operating under different rules, has 8 per cent VAT with a minimum spend of CHF 300 (97959.51 Naira).
What shops offer VAT refunds?
Not all, so beware - look for the "Tax Free" sign as you enter. There are some 2,000 stores in the UK offering the service: big department stores and designer shops are very likely to, while little small-town stores or boutiques may not. Stores and outlets catering to tourists - like Selfridges, Harrods and Bicester Village - often have dedicated 24/7 areas for VAT refunds.
What is the process in the shop?
Ask at the till – you may have to go to a different till to pay if you also need to fill in VAT forms. Do not forget to take your passport with you when you shop: you will need this to prove you are not an EU resident. The form is generally known as the VAT 407 form. It is invalid without both your and the retailer’s signatures. This form can look quite different from store to store – often just a very long till receipt.
Is there any commission to pay?
Yes, and the fee will vary depending on the value of your shopping, the retailer’s fee and the tax refund agency fee from, say, Global Blue or Premier Tax Free. At Global Blue, a £350 spend would only get you a refund of £40.50 on VAT of £70. Joni de Vogel-Smeenk, the founder and chief executive of vatfree.com, says Global Blue can charge fees as high as 50 per cent of the VAT. Further fees will be charged for cash refunds too.
Any alternatives to paying a commission?
Vatfree.com, a peer-to-peer platform set up by the Booking.com founders, helps travellers use a mobile app to claim VAT back directly from stores, which can “easily reimburse” shoppers using the website’s tools. Fees are “less than half of what tax refund agencies charge”, says Ms de Vogel-Smeenk.
What is the process?
Don’t lose your paperwork (receipts or VAT forms). Forms and purchased items will need to be presented for inspection, new and unused. And remember - no customs stamp, no refund. If you sign up for a Global Blue card, forms are automatically completed by the agency.
Anything else to remember?
You must leave the UK by the last day of the third month after you made the purchase to receive a VAT refund – for instance, for a July purchase, you must take them out of the EU by October 31. And you should not have spent longer than 365 days in the EU over the past two years
How long should I expect to wait at the airport?
Travelex says the average waiting time at London Heathrow during peak periods can be around 40 minutes but a Friend told me she once waited two hours at Terminal 3 (from which Emirates flies) before giving up on the VAT refund altogether at the risk of missing the flight. Ms de Vogel-Smeenk says you should allow at least half an hour at all other EU airports.
Can I avoid the queue?
Travelex manages London Heathrow’s VAT refunds on behalf of customs and has a £10 fast-track service at all terminals and a new £120 personal appointment at the British Airways Terminal 5, with no waiting time. The appointment must occur within four hours of your flight departure time; if you are more than 15 minutes late it will be cancelled and your £120 refunded.
At any UK airport, if you have small items you can hand-carry, you can go to customs and have your VAT processed after security, avoiding the big queues at the front of the terminal before check-in for items that must go into checked-in luggage. You will need to do this for electronics, jewellery and watches over £250.
I’m visiting more than one EU country – how do I claim VAT?
Show your goods, till receipts and refund form for all your shopping from all countries to customs in the last EU country you visit.
How long will the refund take? What do I do if I don’t get my refund?
Her Majesty’s Revenue and customs (HMRC) simply says you should expect your refund within a ”reasonable time” and advises you to write to the shop – not HMRC – if that has not happened. Vatfree.com say they expect refunds from the shops within 40 business days.
What if there are no customs officials available?
You can file your paperwork and receipts in a special customs mailbox near the customs desk and they will be processed by customs for a refund, if everything is in order.
I’m a Briton living in Nigeria and visiting the UK on holiday. Can I claim my VAT back?
Yes. You are still a UK citizen but not a resident. You will need to show your passport and residency visa. The same goes for any other EU citizens who live and work in Nigeria and indeed, anyone who can prove they are living outside the EU for at least 12 months.
What about duty-free at UK airport stores?
Airport stores are no longer VAT-free and often only a little cheaper than the high street. In a row in 2015 it was discovered that showing boarding passes at UK airport shop tills allowed retailers to benefit from the VAT refunds without always passing savings on to passengers. The pharmacy Boots has recently announced that it will refund VAT for items over £5.
Can I get a VAT refund on my hotel bill?
No, you cannot get a refund on any service charges such as hotel stays or restaurant meals, only goods you are exporting.
What if I ship the goods?
Shipping goods will avoid VAT at the point of purchase – but your savings may be wiped out by shipping charges and the import duty you will pay in Nigeria, which is based on the value of the goods and averages 5 per cent.
What about online shopping?
Shopping online or by mail order does not count for VAT refunds; you have to have been in the shop at the time of purchase, although you don’t have to be the person who paid.
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