BUYERS traveling to the UK can save hundreds of euros on luxury goods under a new scheme offering tax-free perks to overseas visitors.
British Chancellor Kwasi Kwarteng has proposed that non-British visitors to the UK can claim VAT refunds on goods they buy in shops if they take them home in their personal luggage.
It effectively takes ‘tax-free shopping’ beyond the airport and onto Britain’s high street.
For the Irish, this could mean savings of hundreds of pounds on popular wearable items.
A lot could be saved on smartphones, laptops and game consoles, as well as on designer clothing, handbags and jewellery.
That means Irish visitors to London can get a new iPhone 14 for just £879.20, but the same device at the Apple Store Victoria Square in Belfast costs £1,099.
At the higher end of the price spectrum, a top-of-the-line Hublot men’s watch worth £83,000 will cost you a discount of £66,400 in the UK.
However, with the scheme being limited to England, Scotland and Wales, Republic of Ireland consumers cannot simply slip across the border to the north for a 20 per cent discount.
It’s unclear if the measure will be rolled out in time for the holiday shopping season – some reports suggest it could take 2024 to be implemented.
But once introduced, it could seriously disrupt the expensive gadget market here.
And it leaves Northern Ireland retailers largely outside of the UK’s attempt to revitalize the UK economy, the ‘Growth Plan 2022’ mini-budget.
Instead, under the Northern Ireland Protocol, Northern Ireland and the Republic of Ireland remain part of the same VAT regime, albeit at different rates with 20 per cent VAT in the north versus 23 per cent south of the border.
“This is a missed opportunity,” said Glyn Roberts, Managing Director of Retail NI, which represents independent retailers in Northern Ireland.
“We were looking for a general VAT reduction that wasn’t there [the plan]. If it’s designed to help high street businesses, it’s a disappointment.”
Mr Kwarteng unleashed historic tax cuts and a huge surge in borrowing in an economic agenda that took financial markets down with sterling and UK government bonds in freefall.
He abolished the country’s top tax rate, scrapped a proposed corporate tax hike and put a price tag on Prime Minister Liz Truss’ spending plans, which aims to double Britain’s economic growth, for the first time.
Investors shed short-dated UK government bonds as quickly as possible, with the cost of borrowing over five years seeing its biggest one-day rise since 1991, when the UK boosted its fiscal-year bond issuance plans by £72.4bn.
The pound slipped below $1.11 for the first time in 37 years.
https://www.independent.ie/business/irish/uk-vat-cut-irish-shoppers-to-save-hundreds-of-euro-on-luxury-goods-42012684.html UK VAT cut: Irish shoppers save hundreds of euros on luxury goods