One of my favorite places in Europe to go shopping outside of Paris is London. With all the news swirling about Brexit you may be wondering if you can still take advantage of the VAT Tax Refund in the UK on designer bags or designer goods.
**** AS OF OCTOBER 17TH THERE HAS BEEN ANOTHER REVERSAL, AND THE UK WILL NOT BE REINSTATING THE VAT TAX REFUND.
***MAJOR UPDATE!! AS OF SEPT 2022, THE UK HAS ANNOUNCED THEY WILL REINTRODUCE TAX FREE SHOPPING FOR INTERNATIONAL TRAVELERS. GET ALL THE DETAILS HERE!
In short the answer is no, as of Jan 2021 the VAT tax refund policy in the UK will be eliminated. That means you will no longer be able to take advantage of the VAT Tax Refund in the UK.
As you know, I love shopping and love designer handbags. When I first heard the news of the VAT tax refund being eliminated in the UK, I was shocked. I had so many questions, such as what does this mean for me, why is the tax being eliminated in the UK, will designer bags be more expensive in the UK now that the VAT tax refund is gone. I figured, if I had these questions, then you guys probably were curious as well. Below I've rounded up a few questions, did tons of research to answer the questions I received regarding the VAT tax refund being eliminated in the UK.
What is the VAT Tax Refund Policy?
Before we jump into all the details of the VAT Tax Refund being eliminated in the UK. I wanted to give you a quick reminder of what the refund policy even is.
The VAT Tax Refund is a 12% percent discount you receive when buying goods over 175.01€. When you purchase these goods you fill out a form, then at the train station or airport you drop off the form in the mailbox and receive your refund. This refund is a game changer when it comes to purchasing designer bags. If you purchase enough designer goods, or even if you have a big enough dollar amount being spent in Europe, it could practically pay for your entire trip.
If you are looking for a more comprehensive guide of what the VAT tax refund policy is, I've written an entire article about the policy you can check out here.
What does that mean for you?
Well in short, it means that in January 2021, you will no longer be able to receive that extra 12% off if you spend more than 175 Euros in London / the UK.
Should I purchase my designer bags in another EU Country?
The good news is that the VAT Tax Refund is not going to be eliminated in other EU countries. Therefore, you can still receive your 12% discount from popular shopping hubs such as Paris, Milan, and other EU countries.
Will the designer bags increase in price in the UK because the VAT tax is being eliminated?
The tax refund is a huge draw for you to buy designer goods in Europe, with the elimination of the VAT tax refund in the UK, buying designer bags in the UK is no longer as appealing as it once was.
If you are wondering if the UK will do something to counter the 12% VAT tax refund loss, you’re not alone. The answer is I don’t know if the UK will do anything. The government knows they will lose business when it comes to luxury shopping. The refund is a huge draw for foreigners to buy luxury goods, but will they actually do something internally to ensure that they are competitive amongst their EU counterparts? I’m not sure.
Recap on the new VAT Tax Refund in the UK with Brexit
In conclusion, I know it’s a huge bummer that in Jan 2021 the VAT tax refund will be eliminated in the UK. Given the fact that Covid is preventing people from traveling it makes it even more difficult to take advantage of the current tax refund that is in place now. With that being said, I highly recommend that if you are traveling to Europe after January 2021 to still go to the UK, there are so many incredible places to see. If you are traveling to Europe for a shopping trip only, then I recommend that you take advantage of the other EU country that still has the VAT Tax Refund in place.
Sincerely Petite in Paris,