HMRC announces the end of the retail exports scheme but extends duty free shopping

Hillier Hopkins LLP

Chartered Accountants & Tax Advisers

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HMRC has published its response to the consultation on the retail exports scheme and the duty free shops.

At this time, private individuals travelling to and from the UK have two sets of thresholds for purchasing goods in the UK or bringing them into the UK.

Sales of goods at airports, ports, on board international flights, trains and ships where the journey is within the EU are not currently duty free. However, where the journey takes place outside the EU, travellers can get their purchases free of VAT and duty. From 1 January 2021, all sales from duty free shops in ports, airports and on board international journeys will be duty and tax free.

The current retail export scheme where travellers going to non-EU destinations can get a refund of VAT from participating outlets is to be scrapped from 1 January 2021, with the exception of goods being shipped from the retailer to the person’s home address in another country. Retailers will need to be aware of the various declarations rules, depending on the size and value of the goods involved.

Travellers currently coming into the UK from the EU enjoy no limits to the amounts of alcohol and tobacco that they can bring into the UK, provided that it is for “personal use”. HMRC reserves the right to ask questions if the amounts being brought in are over certain amounts, but do not, on the whole look at the amounts being brought in through the “Green Channel”.

Travellers coming into the UK from non-EU Countries face limits on the amounts of alcohol and tobacco that they can bring in customs duty and VAT free. In addition, there is a maximum value of £390 for other goods being brought in (£270 if coming in by private boat or aircraft.)

From 1 January 2021, goods brought in from the EU will be subject to the same allowances as are currently in play for non-EU countries, although the UK is looking to increase the alcohol allowance. The tobacco and other purchase allowances will remain the same. Excise duty may be payable on alcohol and tobacco products within these allowances:

Alcohol Tobacco Other
16 Litres beer 200 cigarettes £390 other goods from commercial flights etc.
4 litres wine (not fortified or sparkling) 100 cigarillos £270 other goods on private flights etc.
Either: 1 litre spirits or 50 cigars
2 litres sparkling wine (or split between the two) 250g tobacco

Over these allowances, there is a flat rate of 2.5% customs duty (and VAT) up to £630 and, for tobacco and alcohol products, excise duty. Over £630, the customs duty, VAT and excise duty will depend on the goods and the tariff codes. Click here for a link to the recent consultation.

Should you have any queries or require any assistance please get in content with our friendly expert Ruth Corkin on or 0330 024 3200.


Do you need extra information?

Ruth Corkin - Prinicipal - VAT and Indirect Tax Advisory at Hillier Hopkins

Ruth has been involved with VAT for over 30 years. She started her VAT career as a Customs and Excise Officer in Essex and then moved into consultancy with a variety of well-known accountancy firms. She is well known in the VAT world and is the proud author of many articles and technical works.

Contact Ruth at or on +44 (0)1908 713860

Based at the following office - Milton Keynes, Watford and London