Value-added tax (VAT) is a 20% sales tax levied on most goods and services except basic food items, books and children's clothing. Restaurants must, by law, include VAT in their menu prices.
If you are travelling for leisure purposes or visiting friends and family, you may be eligible for a VAT refund. You need to have spent fewer than 365 days out of the two years prior to making the purchase living in the UK, and you must be leaving the EU (for at least 12 months) within three months of making the purchase.
The VAT refund scheme is called the Retail Export Scheme or Tax-Free Shopping. Not all shops participate in the scheme, and different shops will have different minimum purchase conditions (normally around £75 in any one shop).
On request, participating shops will give you a special form (VAT 407). This must be presented with the goods and receipts to customs when you depart (VAT-free goods can't be posted or shipped home). After customs has certified the form, it should be returned to the shop for a refund (minus an administration or handling fee), which takes about eight to 10 weeks to come through.
To find out more about tax reclaim opportunities for leisure travellers an agency such as Premier Tax Free for Leisure Travel.
Information for Business Travellers
If you are travelling for business purposes, please note that tax reclaim opportunities exist for overseas companies and individual travellers.
Business and leisure travellers can find out more about VAT and claiming tax back at the HMRC website www.hmrc.gov.uk/vat/sectors/consumers/overseas-visitors.