The Government agreed to a Committee Stage Amendment to the Brexit Omnibus Bill, reducing the proposed minimum purchase threshold of the VAT Retail Export Scheme from €175 to €75. The Government says that the reduction considers the needs of the retail sector while also responding to concerns that there could be significant abuse of the scheme, given Ireland’s proximity to the UK and the volumes of traffic between the two countries.

The VAT Retail Export Scheme enables travellers that are resident outside the EU to benefit from VAT relief on goods that are purchased in the EU and subsequently exported when the traveller leaves. UK residents will be eligible for VAT refunds on purchases of qualifying goods under the scheme, post Brexit.

Reports suggest that the amendment to the Bill has not been well received by businesses, with the changes considered to be “wholly inadequate”.

France actioned to reduce the minimum purchase threshold for their VAT Retail Export Scheme from €175 to €100.01 in recent times also. Following a consultation process HM Treasury announced plans in September to withdraw the VAT Retail Export Scheme for non-EU visitors from 1 January 2020. This will make the UK one of the only countries not to offer tax-free shopping.

The VAT Retail Export Scheme does not apply between Ireland and Northern Ireland, as EU VAT rules on goods apply to Northern Ireland under the Ireland/Northern Ireland Protocol.