Are you paying too much for your holiday shopping?

Brits missing a fortune in VAT rebates

Updated: 
BANGKOK, THAILAND - MARCH 15 : Fake handbags on display at Jatujak or Chatuchak Market on March 15, 2015 in Bangkok, Thailand. J

British travellers are failing to claw back tax when making holiday purchases abroad.

While most of us have noticed store signs promising VAT-free shopping to foreigners in the UK, it's not widely known that the same perk applies in reverse.

Refunds are available from a number of destinations including Thailand, Japan and Israel, though not, unfortunately, countries within the EU. The amount you can claw back varies by country.

But according to research from Direct Line Travel Insurance, only one in 14 of us has bothered to claim in the last two years.

Of these, 42% said they hadn't known they could, with 14% unable to do so because they hadn't kept proof of purchase, while 12 felt their claim wouldn't be big enough to be worthwhile. Another 12% said it seemed too much of a hassle.

"Getting some of the money you've spent back when returning from holiday should be an opportunity too good to miss, but millions of people aren't taking advantage of it," says Tom Bishop, head of travel insurance at Direct Line.

"We're big spenders when it comes to shopping abroad, so the tax on these items really does add up and once you have arrived home it will be too late to claim."

Each country has its own rules, so you'll first need to check whether it offers a VAT or Goods and Services Tax (GST) rebate. You'll need, of course, to keep receipts, but many international airports have a dedicated reclaim desk to make the process easier.

And with British travellers spending an average of £227 per trip on such items as jewellery and clothing, each rebate could amount to as much as £35.

"Check before you travel if your holiday destination offers a VAT or GST rebate, keep all your receipts and ensure you have sufficient time at the airport or port to make a claim before you leave," says Bishop.

"It is also worth checking in some stores while shopping, as some retailers have their own tax free refund centres. It is always worth keeping receipts when travelling abroad in case you need to make an insurance claim."

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