Business News
Tax facts for your holidays
If you’re lucky enough to be escaping on your holidays this month, you will be pleased to hear that you can now bring back more duty-free than ever before!
A change to legislation this year means that travellers are now permitted to bring back VAT and duty free goods to the value of almost £400 when travelling by air or sea to countries outside the EU such as Australia or Japan, covering everything from electronic goods and perfume to clothes and souvenirs.
George Bull, tax partner at Baker Tilly, outlined: “This is clearly good news for those who can obtain the latest items at cheaper prices while travelling, particularly as the VAT rate in the UK will increase to 20% from 4 January 2011, making domestic purchases even more expensive. However, travellers should be warned that as soon as the £390 limit is exceeded, VAT and import duty is due on the entire value of goods brought back into the UK, and not just the excess.”
In contrast, anyone holidaying within the EU can enjoy limitless spending on duty free goods and bring back as much as they can carry for their own use. This is because VAT has already been paid on the goods in the country where they were purchased.
However, if you favour snapping up your duty free at the airport, be sure to avoid Heathrow where a recent survey found that departure lounge retailers at the airport offered only a mere 3.1% discount in comparison to the high street.
Two French airports topped the poll, with Lyon offering an average saving of 11.9% on the High Street price, closely followed by Charles de Gaulle with 11.5%.
At least they won something this Summer...
