‘Confusing’ DF rules surface in hard Brexit scenario

By Luke Barras-hill |


The government has announced it will launch a new online service to help passengers check what taxes and duties may be due.

UK-bound travellers from the EU will be offered the choice to carry duty & tax free shopping and duty & tax paid goods into Britain in the event of a hard Brexit, but not both without incurring possible fees, TRBusiness has learned.

It has already been established that EU-bound passengers from the UK will only be able to avail themselves of duty free alcohol and tobacco, with VAT at this stage still applicable to all other airside products [something the travel retail lobby is fighting hard to reverse – Ed].

However, information obtained by TRBusiness maps out proposed government details of a new tax regime governing travel from the EU to the UK, with several complicated scenarios emerging that could result in travellers being slapped with additional taxes and duties.


European Union arrivals to the UK will still be able carry an unlimited quantity of goods (including excise goods) into the country – as they do today – provided they are for personal consumption/gifting, are transported by the traveller, and the duties and taxes have already been settled in the originating country.

They can also choose to benefit from *duty free & tax free shopping instead of duty paid, but could be hit with sharp penalties should they decide to purchase both.

For instance, a traveller from Italy buying 10 cases of wine and 200 cigarettes on a duty paid basis would not be liable for UK VAT or duties, as only duty paid alcohol and tobacco is being purchased and is within the permitted limits.


Current HMRC plans in the event of a no-deal Brexit means UK travel retailers could sell alcohol and tobacco free of excise duty and VAT to EU-bound passengers, but all other airside goods sold to these passengers would be tax paid.

On the other hand, should the traveller choose to collect a litre bottle of vodka from duty free at the airport on top of their existing 10-litre duty paid quota of wine, this would trigger rest of the world allowances for all the purchases – these are the same allowances for goods brought in from non-EU countries and apply across all tax free and tax paid categories, meaning travellers would be treated the same as those from non-EU countries.

The current duty free allowance for wine (not sparkling) for UK arrivals from outside the European Union is four litres.

In practice, this would mean the traveller would exceed the ROW allowance on wine, resulting in them having to declare the goods and pay additional tax/duty.

The vodka would not incur additional tax/duty as it stays within the existing spirits allowance.

Similarly, if a traveller buys a €1,500/$1,650 handbag from La Rinascente Milan, does not claim a VAT refund but purchases 200 cigarettes at duty free, rest of the world allowances are again activated.

While the 200 cigarettes fall within the ROW tobacco allowance, the traveller would need to declare and pay added fees on their €1,500 handbag purchase as it falls outside the £390/$500 **other goods allowance.

In all cases, should the traveller not have shopped duty free, they would not be at risk of being liable for extra taxes or duties. If they exceed their allowance, they will be liable for UK VAT and duties on the full value of the goods bought (not just those those above their allowance).

It is important to point out that these are temporary rules that may only apply in the likelihood of a hard Brexit scenario; should a deal be struck, the status quo (no duty free between the UK and EU) will continue to apply during the transition period.

There are other rules that apply to claiming VAT refunds in the EU, with some goods subject to duties before entry to the UK.

The emergence of these scenarios marry with updated UK HMRC guidance published last month, which includes a new online service effective from 23:00 on the day the UK leaves the EU.

The platform, which is also available to non-EU travellers to the UK, is intended to help passengers check what taxes and duties may be due, declare goods and pay any tax or duty. They will be able to do this up to 72 hours before arriving in the UK.

“Leaving the European Union (EU) without a deal means some changes in the rules for individuals travelling to and from the UK, although the majority of travellers should experience little or no change,” reads the guidance.


François Bourienne, Chair, UKTRF says the proposed rules mean travellers to the UK are at risk of being charged hundreds of pounds should they fail to get to grips with the new tax structure.


One source close to the matter expressed concerns over the practicalities of the rules and what they would mean for travellers, aside the unfair disadvantage placed on UK travel retailers should they only be allowed to sell duty free tobacco and alcohol.

While the threat of a no-deal Brexit has reduced significantly, it has not disappeared entirely.

Despite gaining approval from EU leaders for his draft withdrawal deal, UK Prime Minister Boris Johnson failed to muster enough support from the House of Commons to allow the UK to depart the EU with an agreement before the 31 October deadline.

Brussels has agreed to a Brexit extension until 31 January, but a General Election in the UK slated for 12 December is looming.

The UK could still leave the bloc without a deal if the withdrawal agreement is not approved by 31 January or at the end of the transition period.

UK Travel Retail Forum (UKTRF) Chair François Bourienne told TRBusiness: “With the outcome of the Brexit process far from certain, the UK Travel Retail Forum remains very concerned by the proposed rules and government messaging for inbound duty and VAT free sales in the event of a no-deal Brexit.

“The proposed rules would put in place an unfair relationship between tax paid and duty free goods, would place an unfair burden on passengers, and risk damaging the reputation of UK airports, ports, retailers and the government. Customers travelling to the UK risk being charged hundreds of pounds simply for not having intricate knowledge of the new tax structure.

“The UKTRF has been actively engaging with the government on this issue, and has already met with Ministers and officials to convey our concerns. We welcome the Government’s willingness to engage with us on this point, and look forward to resuming these important discussions as soon as purdah [pre-election period in the UK – Ed] ends.”

 *Travellers from outside the European Union are permitted to the following exempt of duty: Beer (16 litres), non-sparkling wine (4 litres), cigarettes (200), cigarillos (100), cigars (50), tobacco (250g).

**Other goods are subject to a £390 duty or tax cap (£270 if travelling by private plane or boat), but if a single item is worth more than the allowance the traveller pays customs duty and possibly import tax on the full value of the goods (not just on the amount above the allowance).


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