VATRESNI8200 | Handling correspondence: Failure to comply with conditions

Below is a draft letter that may be used when a traveller is not eligible to receive a refund because the conditions of the retail export scheme have not been met. The letter should be adapted to suit individual circumstances.

Dear [insert name],

VAT Retail Export Scheme

Thank you for your letter of [insert date] concerning a VAT refund on goods purchased on a recent visit to Northern Ireland.

Visitors to Northern Ireland can obtain relief from VAT on personal goods they purchase for export, provided they are supplied by way of the retail export scheme. Retailers who operate the scheme are faced with an extra administrative burden as they are required to keep special records when making refunds abroad. For these reasons participation by retailers is on a voluntary basis.

For a supply made under the scheme to be zero rated (supplied VAT-free), the retailer has to ensure that the following conditions have been complied with:

a. the customer must be entitled to use the scheme (for example, is a non-EU visitor);

b. the entitled customer must make the purchase in person and complete a retail export scheme form at the retailer’s premises at the time of purchase;

c. the goods must be exported no later than the end of the third month following the month of purchase;

d. the goods and refund form must be produced to Customs at the final departure point from Northern Ireland/the EU; and

e. the retailer must make the refund to the customer before the sale can be zero-rated in his records.

In your particular case, it would appear that the conditions of the retail export scheme were not complied with in that [insert details] and therefore you are not entitled to a refund of VAT. I am sorry I cannot give you a more favourable reply.

VAT notice 704/1, Claim VAT back on tax-free shopping in Northern Ireland, which can be found on the Gov.UK website, explains the retail export scheme in more detail.

Yours sincerely,