The government has published a consultation on the VAT and duty treatment of goods carried across borders by passengers for their personal use. At the end of the transition period on 31 December 2020, indicative limits for bringing goods into the UK from the EU (or vice versa) may no longer apply: for example, the current indicative limit of 90 litres of wine which can be brought into the UK from the EU might be replaced by the limit of 4 litres which can be imported from the rest of the world. The consultation therefore considers what amount of goods passengers should be allowed to bring into the UK without paying duty and tax, what rules should apply to the sale of duty-free or tax-free goods to passengers on departure from the UK, and how the VAT retail export scheme (which allows certain non-UK residents to obtain a VAT refund on high street goods) should apply.
These changes will affect any individuals travelling to and from the EU. Revisions to the duty-free rules and the VAT retail export scheme could affect all UK retailers.
The consultation closes on 20 May 2020. Any changes will need to be brought into effect before the end of the transition period i.e. by 31 December 2020.
In September 2019, the then Chancellor announced a generous duty and tax-free regime that would apply in the event of a no-deal Brexit. This consultation suggests that, the regime after 31 December 2020 may be more restrictive.