Tourists find it taxing to claim UK's VAT refunds

CONFUSING: Britain's VAT refund system is too complex, say experts and visitors. The minimum amount spent to qualify for a refund varies from shop to shop, and there are also different service fees charged for the refund.


    Mar 29, 2016

    Tourists find it taxing to claim UK's VAT refunds

    TOURISM experts and overseas visitors, including those from China, have criticised Britain's tax-refund system for being too complex and time-consuming.

    The scheme, in place since 1995, allows tourists from outside the European Union to claim back valued-added tax (VAT) on any purchases made in the country upon departure.

    But critics argue that it threatens Britain's bid to become a major shopping spot.

    "The poor VAT refund experience, as well as hidden fees, certainly decreases Chinese travellers' satisfaction about their UK travel and lowers the UK image as a destination," said Yang Jingjing, a lecturer on tourism development at the University of Surrey.

    According to the rules, non-EU residents who buy goods in the UK can apply for a VAT refund when they leave the country.

    In theory, this involves filling a form and presenting it with receipts to a refund booth, say, at the airport.

    In practice, however, the procedure can be time-consuming, proving an extra burden for passengers who already need to pass through lengthy security checks.

    The complexities of the procedure, the number of companies that operate refund programmes and long lines at airport counters mean many tourists are either losing out or being charged what some say are exorbitant fees.

    To qualify for a VAT refund, tourists have to spend a minimum amount, which varies from retailer to retailer.

    At the point of sale, foreign customers can ask for a refund form and the retailer and/or VAT refund operator will charge a service fee.

    Rates vary depending on the sum and operator.

    The main refund operators are Global Blue, Premier Tax Free, Tax Free Worldwide and Innova Tax Free.

    Firms such as Travelex, Moneycorp and International Currency Exchange process the refunds and handle currency exchanges.

    "I'm very confused by the different rates charged by the retailer and the VAT refund operators," said Qian Sujia, a visitor from Hangzhou.

    "As a tourist, I can't do much but I'd appreciate it if someone could provide a clear table for what will be charged."