Can Brits go on VAT-free spending sprees in Spain because of Brexit? An EXPLAINER on various taxes that now – or no longer – apply as of January 1

Britain has left the EU and is free to set its own value-added tax (VAT) laws. It has already made the most of this by announcing changes to the VAT on various goods and services, such as water supplies and medical equipment, and by abolishing the controversial ‘tampon tax’.

As many Britons have found out already, though, Brexit has also come at a price. Bringing products into the UK from the EU, for example, can now cost an arm and a leg.

But where is the red tax tape stickiest? And what are the conditions for going on a VAT-free spending spree in Spain?

Here are the answers to these questions and more.

Import duties after Brexit – Alcohol

The great British ‘booze cruise’ is over. Trips to Calais to stock up on liquor are simply no longer worth the hassle, as the amount of alcohol you can transport from the EU to the UK is limited to:

– 42 litres of beer.

– 18 litres of non-sparkling wine.

Plus either:

– Four litres of spirits and other liquors over 22% alcohol.

– Nine litres of fortified wine (for example, port, sherry), sparkling wine and alcoholic drinks up to 22% alcohol.

The last allowance can be split, meaning that you could bring, for example, 4.5 litres of fortified wine and two litres of spirit (as each make up half of their respective allowances).

Tobacco

Tobacco prices across Europe vary enormously. When I was at university in Exeter, my Bulgarian flatmate would always return from a summer in the Balkans with around 1000 cigarettes, saving herself a fortune even if the cost to her lungs was high.

Travellers entering the UK from the EU can only bring in a maximum of:

– 200 cigarettes.

– 100 cigarillos.

– 50 cigars.

– 250g tobacco.

– 200 sticks of tobacco for electronic heated tobacco devices.

Again, you can split this allowance; for example, 100 cigarettes and 25 cigars.

Other goods

Ignoring VAT for the moment (we will come to it shortly), you can bring any goods worth up to £390 into the UK without having to pay import duties (or up to £270 if you are arriving by private plane or boat).

However, if you spend more than this, you will have to pass through the red airport channel in the UK. That means dishing out an extra 2.5% for some goods worth between £390 and £630, and even more than that for certain goods of greater worth.

Goods exceeding £630 will also incur excise duty and VAT. Because the excise duties change for each type of good, it is useful to use HMRC’s tax calculator to figure out how much exactly you need to pay.

VAT refunds in the EU                

Brexit does have one positive consequence when it comes to VAT: Britons who are not resident in an EU country can now get VAT refunds on purchases made in the EU. As Francesca Cerqua, Knowledge Manager at Marosa VAT in Spain, clarifies:

“If a UK traveller visits Spain and makes purchases where Spanish VAT is charged and the value of those purchases is above €90.15, he or she will be able to reclaim that Spanish VAT in the airport before taking the plane back to the UK.” 

In addition to spending a minimum of €90.15, a British holidaymaker shopping in Spain must:

– Live in England, Scotland or Wales.

– Bring the unused goods outside of the EU within a three-month period.

– Display their passport upon purchase together with a separate document providing proof of address.

– Complete an electronic refund document while in EU territory and have it validated at EU customs.

When making the purchase, request an electronic refund form (known by the initials DER in Spain), which you must validate electronically before checking in your luggage at the airport. To do this, go to the indicated counters, or the offices displaying the tax free seal, and show them: 

– Your passport.

– The goods for which you are requesting the refund.

– Your boarding pass or ticket. 

This is a fully digital process, so you won’t receive a physical document after validation. However, technophobes like myself can check the status of their refund at any time by putting their CSV number (secure verification code), which appears on their electronic tax free form, into a search bar on this webpage.

British nationals resident in an EU country are not eligible to reclaim VAT on purchases made within the EU.

And remember, if the goods are worth more than £390 in total, they will have to be declared at customs in the UK, incurring import VAT.