Retail Export Scheme (Northern Ireland)

HMRC has updated VAT Notice 704: Retail Export Scheme (Northern Ireland) to clarify the treatment of goods moving from Northern Ireland to Great Britain where a claim has been made under the VAT retail export scheme.

The Notice explains when supplies of goods sold by VAT-registered retailers in Northern Ireland to overseas visitors for personal use and exported as accompanied baggage can be zero-rated. In particular, it sets out the conditions that must be complied with by retailers and overseas visitors using the VAT Retail Export Scheme. For the purposes of the scheme, ‘overseas visitors’ are those who are visiting Northern Ireland and who live outside of NI or the EU, and NI or EU residents who are leaving NI and the EU for more than 12 months.

HMRC has updated its guidance at section 6 ‘Overseas visitors removing goods to Great Britain’ to explain how the VAT retail export scheme operates for purchases by overseas visitors who travel directly from Northern Ireland to Great Britain (including via an EU country) and those who travel indirectly – ie via a non-EU country.

For direct movements, Form VAT 407 must be stamped by a customs officer on leaving Northern Ireland or the EU (whichever is the last point of exit before arrival in Great Britain). Import VAT will be due on the goods on arrival in Great Britain (there are no personal allowances for goods imported into Great Britain from Northern Ireland via a direct movement). The guidance notes that in this situation retailers may decide not to offer the retail export scheme.

For indirect movements, the VAT 407 will need to be stamped by a Northern Ireland customs officer on leaving Northern Ireland, or an EU customs officer on leaving the EU. Import VAT will be due on arrival in Great Britain if the goods exceed the personal allowances (the value of the goods will include any goods purchased under the VAT retail export scheme in Northern Ireland).

VAT Notice 704/1: Claim VAT back on tax-free shopping in Northern Ireland has also been updated to cover goods moved from Northern Ireland to Great Britain.