Duty Free Allowances

Treasury written question – answered at on 22 October 2020.

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Photo of Andrew Gwynne Andrew Gwynne Labour, Denton and Reddish

To ask the Chancellor of the Exchequer, what steps his Department is taking to support duty free stores prepare for the changes to duty free shopping from 1 January 2021.

Photo of Kemi Badenoch Kemi Badenoch The Exchequer Secretary, Minister for Equalities

Ahead of the end of the transition period, the Government has announced the VAT and excise duty treatment of goods purchased by individuals for personal use and carried in their luggage arriving from or going overseas (passengers). The following rules will apply from 1 January 2021:

- Passengers travelling from Great Britain to any destination outside the United Kingdom (UK) will be able to purchase duty-free excise goods once they have passed security controls at ports, airports, and international rail stations.

- Personal allowances will apply to passengers entering Great Britain from a destination outside of the UK, with alcohol allowances significantly increased.

- The VAT Retail Export Scheme (RES) in Great Britain will not be extended to EU residents and will be withdrawn for all passengers.

- The concessionary treatment on tax-free sales for non-excise goods will be removed across the UK.

The Government published a consultation which ran from 11 March to 20 May. During this time the Government held a number of virtual meetings with stakeholders to hear their views and received 73 responses to the consultation.

The detailed rationale for these changes are included in the written ministerial statement and summary of responses to the recent consultation: https://questions-statements.parliament.uk/written-statements/detail/2020-09-11/hcws448 and https://www.gov.uk/government/consultations/a-consultation-on-duty-free-and-tax-free-goods-carried-by-passengers.

The Government is also continuing to meet with stakeholders following the announcement of these policies, including to discuss the implementation of duty-free sales for EU-bound passengers in export shops.

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