Shoppers heading to Britain could save hundreds of euros on luxury goods under a new regime offering tax-free benefits to foreign visitors.
Under a proposal from UK Chancellor Kwasi Kwarteng, non-UK visitors can claim VAT refunds on goods they buy in shops if they take them home in their personal luggage.
It effectively brings “duty free shopping” outside the airport and onto the UK high street.
For Irish people, that can save hundreds of dollars on popular wearables. Significant savings can be made on smartphones, laptops and game consoles, but also on branded clothing, handbags and jewellery.
But because the scheme is limited to England, Scotland and Wales, consumers from the Republic of Ireland can’t just slip north over the border for a 20 percent discount.
This means Irish visitors to London can get a new iPhone 14 for just £879.20 (€987), but the same device in the Victoria Square Apple Store in Belfast costs £1,099 (€1,237).
At the higher end of the price spectrum, a £83,000 (€93,000) Hublot men’s watch costs just £66,400 (€75,000) in the UK.
It’s unclear if the measure will be introduced in time for Christmas shopping this year – some reports suggest it could be 2024 until it’s implemented.
But once introduced, it could seriously disrupt the expensive gadget market here.
And it leaves Northern Irish retailers largely out of the UK’s drive to revitalize the UK economy, the mini-budget “Growth Plan 2022”.
Instead, Northern Ireland and the Republic of Ireland will continue to be part of the same VAT regime under the Northern Ireland Protocol, albeit at different rates, with 20 percent VAT in the north versus 23 percent 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 reduction that was not in the plan. If it’s designed to help large companies, that’s a disappointment.”
Mr Kwarteng yesterday unleashed historic tax cuts and massive increases in borrowing in an economic agenda that shook the financial markets, with UK and UK government bonds in free fall.
He scrapped the country’s top income tax rate and canceled a planned corporate tax hike, and put a price tag on the UK Prime Minister’s spending plans for the first time. Liz Trussseeking to double UK economic growth.
Investors redeemed short-term UK government bonds as fast as they could, with the cost of borrowing over five years seeing the biggest single-day rise since 1991, when Britain slashed its plans to issue debt for the current fiscal year by £72.4 billion. elevated.
The pound fell below $1.11 for the first time in 37 years.