VAT: How to Claim a Tax Refund When Shopping in London

Sale Shopping in London

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VAT (value-added tax) is the tax payable on all goods and services in London, and the rest of the United Kingdom. The 2019 standard rate of 20 percent VAT means if you spend 100 pounds at one store, you can claim back 20 pounds at the airport. With store-bought goods, the VAT tax is factored into the sticker price so you don't need to add it to the price displayed when at the cash register. So if a bottle of water is priced at 75 pence, then 75 pence is what you will pay.

As a citizen of a non-EU country, you are not always obligated to pay this tax and can opt for a refund at the airport. If you plan on doing a lot of shopping in the U.K., not taking advantage of the VAT refund means you're leaving money on the table.

VAT Refund Eligibility

If you live outside the EU, if you are an EU citizen living outside the EU with no plans to return in 12 months, or if you are a non-EU resident that works or studies in the U.K. and are leaving the EU for 12 months or longer, you are eligible for a VAT refund upon leaving the U.K. You must be able to show proof that you will be leaving the U.K. to qualify for the refund.

You can claim a VAT refund on anything purchased from participating retailers, which has the VAT included in the price. This does not include services, such as hotel stays, items bought online or through the mail, unmounted gemstones, consumable goods that have been opened, cars, goods you have used or worn, gold weighing over 125 grams, items that need an export license, or goods worth over 600 pounds that are being exported for business purposes. The VAT refund is strictly intended for commercial goods.

Many stores have a minimum amount that you need to spend before qualifying for a VAT refund and some stores don't participate in the refund program at all. If you are planning on spending a lot of money at one particular store, make sure you ask them about their VAT policy when you enter. For example, the VAT minimum at Harrods in London starts at 50 pounds.

How to Claim a VAT Refund at the Airport​

The best time to get your VAT refund is at the airport when you are leaving the U.K., but you really should start thinking about it before you head to the cash register, as you will need to make sure you get the proper forms. It's important that you don't use the items you purchase before you claim the refund. This means you cannot claim a refund for a jacket you are currently wearing—even if you just bought it the day before. Some officials might look the other way, but it's not worth the risk. If you are in the U.K. for more than three months and want to get a VAT refund upon your exit, note that you can only get refunds on items purchased within the last three months.

  • When making a purchase, ask the retailer for a VAT Refund Form (also called a VAT 407 form). The retailer might ask for your passport to verify that you're eligible for the refund.
  • Complete and sign the VAT Refund Form.
  • To claim a VAT refund on goods that will be packed into checked luggage, go to customs before security at the airport, where your VAT Refund Form will be checked and stamped. After it's stamped you can check your luggage.
  • To collect your refund go to a VAT refund desk.
  • Depending on the VAT form you've been given, the refund will be issued to your credit card, sent as a check, or will be given as cash. Some retailers charge a fee for handling the VAT form and that fee will be deducted from your refund.
  • If you're claiming for jewelry or electronics worth over 250 pounds and want the items kept in your hand luggage, you'll need to visit customs after airport security.
  • If there are no customs officials available, you can leave your form in a customs mailbox.
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