[Anonymous]

[Deleted User]

Can an accountant please pass some comments. I have been asked to prepare a report about VAT refunds at airports for overseas guests to a convention, which pax all over the world seem to enjoy, some easier than others.

I wanted to start the paper by providing an explanation as to why this sysytem is in place. We as a country, welcome visitors with open arms to spend money here and help to boost our economy. However, when I ask people, why do we give spending visitors their VAT back (which happens all over the world) I am given some really strange looks.

So why do foreign pax queue up for VAT refunds and why is Britain oblidged to give them. Surely it would be far better keeping the tax and perhaps using it to impove our aiports or defray the cost of security.

I look forward to being educated on this subject.

[NTarrant]

Not the answer you are looking for per se, but I disagree with this tax refund business, not only from a UK point of view but also the few other countries such as Norway that do as well.

It really annoys me that a US citizen can reclaim his VAT but the tax I have to pay extra for in the US I can’t. It should be if it has to be so that if a UK citizen can claim the tax back then vice versa.

[Deleted User]

Hi – it actually was the answer I was looking for becasue in preparing to write this article, the overiding question I have, which I am not permited to include (personal comments and all that) is why on earth are their such long queues at the VAT refund counter and why are we repaying VAT to our favoured visitors when they take the goods bought in the UK, away from the UK. Interestingly, I have put this same question to 4 city accountants I work with and all are yet to reply.

I would have thought that instead of refunding VAT, the “refunds” would be better off being used to secure and enhance our gates of entry to make entering and leaving the UK a far more pleasant and cost effective experience.

I must get on with my report so any further background as to why VAT is refunded to overseas visitors, please do let me know. Many thanks

[NTarrant]

Glad to be of help, Regards Nigel

[Deleted User]

Help with my sanity in as much that at least there is someone else out there who questions the refund system….thanks Charles

[Binman62]

I understand that it is a requirement for all EU countries that VAT should be refunded. NTarrant you are absolutely right, it is outrageous that these schemes still exists and at a time of great economic difficulty it demonstrates clearly that tax avoidance, in any of its forms, is frankly encouraged by governments while anyone making a mistake on a benefit claim form will be pilloried.
Canada has made the reclaim so complex and so difficult that it is not worth doing, my last attempt actually costs me money as the cheque they sent was in Canadian dollars. The USA, once the home of no taxation without representation, simply does not offer the service. Australia does, but makes it difficult and expensive. In Singapore it is, like much else easy, but they then offer inducements to spend the refund in the airport shops, very clever and very sensible.
No where is the process easier than it is here and the queues in every terminal every day are testament to the huge sums of money that poor out of this country every day. It should be stopped and stopped immediately.

[NTarrant]

Interestingly Binman, Mrs T and I visited Australia and Singapore last year and didn’t even see any signs to reclaim tax. We certainly didn’t bother.

I mentioned Norway above, we were on a cruise that visited Norway and our second stop was Bergen, we purchased a gift for which the girl in the shop was most helpful in completing the form for us. When we got back to the ship we queued for our money. The guy wanted to give us US Dollars, all 5.00 of them I refused it and protested he didn’t have any change in NKR, so we saw what note he had and gave him the difference. All for £3.00 roughly, wasn’t worth the hassle or the paperwork.

[Deleted User]

Vietnam and Thailand still offer the VAT refund service.

I know that there is legislation in place regarding commercial trade and VAT refunds, espcially in Europe, but its the VAT refund Q’s at the airports that remains curious. Usually accountants are only too pleased to share their wisdom but in this case they have all remained silent. It may be better me thinks to shift this report to someone who can prepare the article without wondering why on earth we have to offer it in the first place.

It would be interesting to consider though, if the money was diverted to airport security etc, how much our airtickets could be reduced by………….

[FlyingChinaman]

VAT refund is a powerful incentive to induce non-EU travellers to spend money and it does help creating jobs and generate profits for the local retailing businesses. I know for sure that I and most of my friends and colleagues living outside the EU might not be buying goods in Europe unless we get the VAT refund. It is just simple arithmetic. Why not suggest to your governments by using the VAT handling refund fee to improve the badly needed airport infra-structure in most European airports ! BTW I am no longer buying anything substantial in Canada or the USA as there is no price advantage!

[BAOBBAOB]

Sometimes these schemes can also work against the country. Some years ago I visted Iceland and claimed back VAT at the airport. Was not a lot (some £25). I was told it would be refunded to my credit card but I never got it…. leaving a bad impression of Iceland!

[iflytoomuch]

Well guess what ???

I don’t even bother claiming anymore when i leave UK as the 3 times I have tried I never got any money back at all . — Bad impression – YES.

But go to EU – Easy and they give you money on the spot … did it recently in Greece ( of all places) and also Schipol …

Unfortunately says something abt efficiency and UK .. and by the way I do have a UK passport … although not resident at the moment…

[FlyingChinaman]

iflytoomuch

I get most of my VAT refunds in EU airports and I totally agree with you that the UK airports are lagging behind in this refund process AND also in most other services as well.

Another factor is generally the luxury goods are priced higher in the UK than on the continent and less of a good buy for me as I live in Hong Kong.even taking the VAT refund (when you do get it back!) into consideration.

[MartynSinclair]

Non EU individuals or businesses fall outside of the VAT radar. Thus those individuals can reclaim VAT paid. However, the goods can not be used or consumed within the EU. HMRC.gov.uk (search under TRAVELLERS) has useful info.

All in all though, the cost of processing these refunds along with the VAT would be better off remaining within UK Ltd and being used to reduce the taxes we all have to pay when passing through our ports and airports.

It may even pay for some of the security staff that UK Ltd may be sending to the unemployment lines as part of the recent public sector spending cuts………

[FlyingChinaman]

To all sufferers,

I can not understand why Europe can not transform their dreary infra-structure at their major airports when the passenger service charges (or rather the lack of it) is imposed on passengers are amongst the highest in world, when comparing to Asian airports. I am sure we got lots of help in technology from the West for building ours and yet the West can not use the same technology to improve their existing facilities!

I have always felt my travel experience when using major Asian aiports is much more relaxing and almost stress-free where as the opposit is true in major airports in Europe. Can other travellers confirm the same thing!!!

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