2024 UK Tax Refund Guide: How to Shop Tax-Free After Brexit?

After Brexit, shopping tourists can no longer enjoy tax refunds and duty-free benefits, which is undoubtedly disappointing news for many shopping enthusiasts. In this article, Kinnso will introduce an interesting shopping tip that allows you to save money while shopping!

According to a document released by the UK Treasury on September 11, 2020, it clearly stated that VAT refunds for overseas tourists after purchasing goods in UK stores would be cancelled, meaning that tax refunds before departure would no longer exist. Apart from tobacco and alcohol, with the cancellation of airport tax refund services and a significant reduction in the types of products available in airport duty-free shops, can overseas consumers still purchase duty-free products in the UK? **Of course they can! But the downside is that they cannot bring them back directly.** Currently, the way for overseas consumers to purchase duty-free products in the UK is through "door-to-door tax refund" services. These services are usually provided by tax refund companies. Consumers can obtain tax refund forms when shopping, and then send the goods to the designated tax refund company office before departure. The tax refund company will process the refund for them. The refunded amount will be returned to the consumer via bank transfer or other specified methods. Although it is not possible to directly carry shopping products out of the UK, through door-to-door tax refund services, overseas consumers can still enjoy the convenience of purchasing goods at duty-free prices in the UK. This method allows consumers to receive the tax refund amount after leaving the country and collect their purchased products after returning to their own country.

Overseas visitors can still buy goods at tax-free prices in the UK, but they cannot take them away directly. Instead, they need to give an overseas address, and after payment, the goods will be shipped directly to that address. At the same time, you are responsible for the corresponding international shipping costs. This method allows overseas visitors to enjoy tax-free shopping in the UK while avoiding the hassle of carrying goods. You only need to provide an accurate overseas address when shopping, and the store or tax refund company will help arrange the shipment of the goods. You can choose to use courier services or postal methods to send the goods directly to your specified overseas address. It is worth noting that you need to pay the corresponding international shipping fees yourself, which depends on factors such as your address, product weight, and shipping method. When choosing this method, it is recommended that you understand the shipping costs in advance and ensure that you provide the correct overseas address to guarantee smooth receipt of your purchased items.

When shopping in the UK, the price of goods includes the price of the item itself and 20% VAT. This tax is for the service of domestic taxpayers, so as a tourist or someone about to leave the EU, you cannot enjoy this tax, therefore you have the right to claim a refund. So who can claim tax refunds? 1. Non-EU residents visiting the UK for tourism, family visits, or business 2. Non-EU students or workers who have been living in the UK long-term and are about to leave the EU, meeting the tax refund conditions for more than 12 months. However, remember that only goods purchased within 3 months before leaving the UK are eligible for tax refunds. (The information provided above is for reference only. Please confirm the local tax refund policies and eligibility requirements before shopping.)

The most commonly heard "tax-free" is airport duty-free shops. Tax-free refers to the exemption of import duties and import value-added tax on goods. Different products have different tax rates, ranging from 20% to 100%. There are no restrictions on tax-free goods; as long as you're leaving the country, anyone can purchase at duty-free shops with a passport and flight ticket. "Tax refund" refers to consumption tax and value-added tax, which vary by country. The UK tax rate is 20%. Tax refunds have identity restrictions, mainly targeting tourists and non-EU residents about to leave the EU. The specific tax refund qualifications have been explained in detail earlier. So, which is cheaper, tax-free or tax refund? Tax-free is fixed. If a product's import duty rate is higher than the value-added tax, then purchasing at a duty-free shop will be more cost-effective. For example, tobacco, alcohol, tea, perfumes, and cosmetics are cheaper when bought at duty-free shops. For luxury goods such as bags, clothes, shoes, and accessories, the import duty rates are originally not high, so it's cheaper to buy from department stores or specialty shops and then claim a tax refund. *For permanent residents, international students, work visa holders, and others who cannot claim tax refunds, it's most cost-effective to buy any type of product at duty-free shops.* (Image source: @CFI)

Tax refund refers to the repayment of Value Added Tax (VAT). The VAT rate differs across countries; in the UK, it's 20%. However, this doesn't mean you'll receive a 20% refund on the product price. The price you ultimately pay includes both the actual product price and 20% VAT, making the VAT approximately 17% of the total price you pay. Keep in mind that this 17% is subject to deductions by the refund company's handling fee. As a result, the final actual refund amount is roughly 12% of the price you paid.

Not all goods are eligible for tax refunds. Some goods do not include tax, so there's no refund to speak of. The following is a list of goods that are **not eligible for refund**: 1. Goods exported for commercial purposes with a value exceeding £600. 2. Goods exported by sea freight. 3. Goods requiring export licenses (except antiques). 4. Individual gemstones not used for inlaying. 5. Gold bars exceeding 125 grams, 75 ounces, or 10 troy ounces. 6. Online purchases (except for some e-commerce that can directly mail to China and offer online refunds). 7. Consumables that have already been used, such as perfumes. 8. Service fees, such as hotel charges. 9. Goods with 0% VAT, for example: most food, books, newspapers and magazines, children's clothing (under 13 years old). 10. Newly purchased cars or second-hand cars. 11. Goods purchased by travelers planning to leave the EU by boat.

1. Make purchases and obtain a tax refund form. Inform the staff at checkout or at the tax refund service center that you need a "tax refund". The staff will issue a tax refund form and place the shopping receipt and tax refund form in an envelope. The staff may ask to see your passport to confirm if the applicant is eligible for a tax refund. 2. Fill out the tax refund form. The tax refund forms provided by different merchants may vary, but the basic information to be filled in is generally the same. 3. Customs stamp. Before departure, present the tax refund form and shopping receipt to customs. After confirmation, customs will stamp the Tax Free Form. Specifically, you need to prepare the following materials: passport, flight ticket, tax refund form, shopping receipt, and the goods for which you want to claim a refund (don't check in your luggage too early, as customs will check if the goods you purchased match the receipt and tax refund form during the refund process. If you cannot present the goods, you will not be able to process the tax refund). 4. Receive the refund. Go to the refund point marked with the relevant tax refund company logo, present the completed and stamped tax refund form, and receive a cash or credit card refund. Currently, there are four main tax refund companies in the UK: Global Blue, Premier Tax Free, Tax Free Worldwide (currently a branch of Premier Tax Free), and GB Tax Free. Not all of these companies can provide cash refunds. Generally, the tax refund form clearly states this, so please identify it clearly before applying.

**Instant Tax Refund** This means processing the tax refund on the spot while shopping, but not many stores offer instant tax refunds. After shopping at Bicester Village, you can directly process the tax refund at the Change Group next to the Visitor Center. **Other Tax Refunds** Some large shopping areas also have tax refund points, but these other refund points have stricter inspection standards than airport tax refund offices, and generally only process refunds for goods purchased locally in the UK. Remember to bring the tax-free items, flight tickets, passport, and tax refund forms from the UK (European tax refund forms are not applicable). **Airport Tax Refunds** 1. London Heathrow Airport 2. London Gatwick Airport 3. Manchester Airport 4. Birmingham Airport 5. Edinburgh Airport 6. Glasgow Airport

Selfridges, one of London's famous department stores, also offers tax refunds! You can try on items in the Selfridges physical store and then have the items you want to purchase shipped to a location outside the UK to avoid paying UK taxes. However, please note that if you choose this service, you cannot immediately take the items with you after checkout!

Some credit cards offer overseas spending benefits. The editor recommends the following travel credit cards to help you earn rewards while traveling! **Hang Seng MMPOWER World Mastercard:** Register for travel foreign currency spending to enjoy 5% cash rebate + FUN Dollar rewards! Up to $800 + FUN Dollars can be enjoyed monthly **CNCBI Motion Credit Card:** New users can enjoy 10% cash rebate on foreign currency spending within the first three months, plus 6% rebate on foreign currency spending throughout the year, totaling up to 16%! **AEON CARD WAKUWAKU:** Waives overseas transaction fees + Additional 4% rebate on overseas spending during the member's birthday month