Shoppers heading to the UK can save hundreds of euros on luxury goods under a new regime that offers tax-free perks to overseas visitors.
Visitors outside the UK can claim VAT refunds on goods they buy in shops if they take them home in their personal luggage, following a proposal by British Chancellor Kwasi Kwarteng.
It effectively takes ‘tax free shopping’ beyond the airport and onto the UK high street.
For the Irish, that could mean hundreds of pounds saved on popular wearables. Significant savings were made on smartphones, laptops and game consoles, as well as on designer clothes, handbags and jewellery.
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.
This means Irish visitors to London can get a new iPhone 14 for just £879.20 (€987), but the same device will cost £1,099 (€1,237) at the Apple Store in Victoria Square in Belfast.
At the top end of the price spectrum, a top-of-the-line Hublot men’s watch is £83,000 (€93,000) for just £66,400 (€75,000) in the UK.
It’s unclear if the measure will be rolled out in time for the holiday shopping season this year – 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, Northern Ireland and the Republic of Ireland remain part of the same VAT regime under the Northern Ireland Protocol, 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, which was not planned. If it’s designed to help high street shops, it’s a disappointment.”
Mr Kwarteng yesterday unleashed historic tax cuts and a huge increase in borrowing in an economic agenda that rocked financial markets with sterling and UK government bonds in free fall.
He has scrapped the country’s top tax rate, canceled a proposed corporate tax hike and, for the first time, put a price tag on Prime Minister Liz Truss’ spending plans to double Britain’s economic growth.
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/well-save-a-fortune-on-vat-free-goods-in-britain-under-new-tax-regime-but-northern-ireland-not-included-42012684.html We’ll save a fortune on VAT-free goods in the UK under the new tax regime – but not including Northern Ireland