Getting a VAT Refund in the UK: Is It Possible?

Sometimes, travelers are able to get a tax refund when they buy goods in other countries. For travelers heading to the United Kingdom, it's a common question.

If you traveled and purchased a few things, are you able to get that tax refunded?

Well, in most cases, the answer is no.

It is a bit more nuanced than that, however, and it is possible in some cases.

Does the UK give VAT refunds to tourists?

In Great Britain (England and Scotland), not at all. However, it is sometimes offered in Northern Ireland.

Before 2021, foreign travelers were able to get refunds throughout the UK, but the VAT Retail Export Scheme (or VAT RES) was abolished for a few different reasons.

"...it is clear that the VAT RES is an inefficient method of seeking to achieve taxation in the place of consumption. It is also a costly system to maintain with unclear economic benefits and is burdensome for exit points." - HM Treasury

In 2020, the HM Treasury said that the VAT RES is a costly program that doesn't benefit all of Great Britain equally, explicitly mentioning that London was where most of the refunds happened.

They went on to say that "...the scheme is an imperfect way of seeking to achieve taxation in the place of consumption, not least due to the risk of fraud and non‑compliance.”

When the program was dissolved, it wasn't dissolved across the board, though. Businesses in Northern Ireland can choose whether or not they'd like to participate in the VAT scheme.

So,

• If you're a foreigner traveling to England or Scotland and want to get a VAT refund, it isn't possible.
• If you're a foreigner traveling to Northern Ireland, you can get a VAT refund if the business you purchase from participates in the program and the goods qualify.

How to get a VAT refund in Northern Ireland

There are a few things you'll need to do to get a VAT refund after shopping in Northern Ireland.

Ask the business if they offer VAT refunds for foreign travelers before you buy.

This is very important, as there are a few things you will need to do at the time of purchase.

If you ask a business and they do participate in the scheme, they are required to give you the refund, but it doesn't mean you will get your money back that day. On top of that, there are still a few things you will need to do to get it.

Also, keep in mind that not all goods qualify for refunds. In addition to that, participating businesses can choose which qualifying goods to offer VAT refunds on.

Prove that you're a foreigner

VAT refunds are only available to foreigners who live outside of the UK and the European Union.

When you're ready to buy your product(s), the business will need to verify that you meet this criterion and are eligible.

Receive a VAT 407 form from the retailer

This form will list a few key pieces of information, like what you are purchasing, the VAT amount, the refund amount, and more.

You will need this form later, so it's very important that you get it squared away.

Agree on how the refund will be made

Refunds can be made in cash advance (from the retailer), by bank, and possibly other methods. It depends on what the retailer offers. They will tell you in what form the refund will happen.

Some retailers do a cash advance refund. This means that they may reimburse you for the cost of the VAT then and there. If this happens, you are not finished with the VAT refund process yet. There is still more to do when you go through customs.

You must leave the UK and the EU by a certain date

In order to qualify for the refund, you will need to leave the United Kingdom (and the European Union overall) within a certain timeframe of when you purchased the goods, and you must have the unused goods with you.

You need to leave the country and the Union by the last date of the third month after your purchase.

Important! Present your VAT 407 form to border authorities

When you leave Northern Ireland or the EU, you will need to present your VAT 407 (or equivalent) and your receipt to the Customs Officer on duty. They must stamp/endorse it in order to finalize the process, even if you have already received a refund.

You must also show them the unused goods that you are exporting.

This is a mandatory step of the process.

Return the VAT 407 form to the retailer or airport counter

You must return the stamped/endorsed form(s) to the retailer or to the airport counter. Again, even if you have already received the refund.

The retailer will give you instructions on how to go about this. Some retailers need you to return the form(s) back to them. Others may allow you to use a counter at the airport.

Get refunded

If you received a cash-advance refund, once you mail the endorsed VAT 407 back to the retailer/airport counter and they receive it, the process is done.

If you haven't been reimbursed yet, you will get refunded after the form/documents are received and processed by your retailer or within the Airport if that is the agreed-upon method.

Your refund will come in the format initially agreed upon.

Not all goods are eligible for VAT refunds

If you're thinking of purchasing something quite expensive, like a car or motorcycle, and getting a tax refund, it isn't possible.

There are exclusions on what types of goods qualify.

The following do not qualify for VAT refunds:

• Motor vehicles (cars, motor scooters, motorcycles).
• Boats and other watercraft in specific cases.
• Aircraft.
• Goods for commercial business use.
• Services (hotels, etc.).
• Goods consumed or used before export.
• Most mail-order goods.
• Goods that need an export license (excluding antiques).
• Unmounted gemstones.
• Zero-rated items (items that have a 0% VAT tax. This includes books, children's clothes, and more).
• Gold or silver over 125g, 2.75 troy ounces or 10 tolas.
• Retailers can choose which items they allow VAT for and which they do not, in line with the legal exclusions.

Some companies want the VAT RES scheme to be reinstated

In 2023, the Daily Mail launched a campaign aiming to bring the VAT RES scheme back to all of the United Kingdom.

Over 350 different retailers and businesses signed the petition, like Burberry, British Airways, and Harrods.

Today, the VAT RES program is not in the process of reinstatement.

FAQs: UK VAT refunds

Can I get a VAT refund in the UK?

How do I get a VAT refund in the UK?