We’ll save a fortune on Vat-free goods in Britain under new tax regime – but Northern Ireland not included
Shoppers who head to Britain will be able to save hundreds of euro on luxury goods under a new regime that offers overseas visitors tax-free perks.
nder a proposal put forward by UK chancellor Kwasi Kwarteng, non-UK visitors will be able to claim Vat refunds on goods they buy in shops if they are taking them home in their personal baggage.
It effectively brings “tax-free shopping” beyond the airport and on to the British high street.
For Irish people, that could mean savings of hundreds of euro on popular portable items. Big savings could be made on smartphones, laptops and gaming consoles as well as designer clothes, handbags and jewellery.
But because the scheme is limited to England, Scotland and Wales, consumers from the Republic of Ireland cannot simply slip over the Border to the North for a 20pc discount.
This means Irish visitors to London will be able to get a new iPhone 14 for just £879.20 (€987), but the same device in Belfast’s Victoria Square Apple store will cost £1,099 (€1,237).
At the higher end of the price spectrum, a top-of-the-range £83,000 (€93,000) Hublot men’s watch will cost just £66,400 (€75,000) in Britain.
It is unclear whether the measure will be introduced in time for Christmas shopping this year – with some reports suggesting it could be 2024 until it is implemented.
But once introduced, it could severely disrupt the market for costly gadgets here.
And it leaves Northern Ireland retailers largely outside of the UK’s bid to revive the British economy, the mini-budget “Growth Plan 2022”.
Instead, Northern Ireland and the Republic of Ireland will remain part of the same Vat regime as per the Northern Ireland Protocol, albeit at different rates, with 20pc Vat in the North versus 23pc south of the Border.
“It’s a missed opportunity,” said Glyn Roberts, chief executive of Retail NI, which represents independent retailers in Northern Ireland.
“We were looking for an overall Vat cut which wasn’t in the plan. If it was designed to help high-street businesses, it’s a disappointment.”
Mr Kwarteng unleashed historic tax cuts and huge increases in borrowing yesterday in an economic agenda that floored financial markets, with sterling and British government bonds in free fall.
He scrapped the country’s top rate of income tax and cancelled a planned rise in corporate taxes, and for the first time put a price tag on the spending plans of UK prime minister Liz Truss, who wants to double Britain’s rate of economic growth.
Investors unloaded short-dated British government bonds as fast as they could, with the cost of borrowing over five years seeing its biggest one-day rise since 1991, as Britain raised its debt issuance plans for the current financial year by £72.4bn.
The pound slid below $1.11 for the first time in 37 years.
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