I used to travel to UK every few months on business and if I bought larger items there I could claim VAT. I have not traveled for some time due to the coronavirus pandemic, but have heard mixed reports as to whether I will be able to do so at the airport when I return after my next trip. Please advise. AW, Abu Dhabi
Previously, international travelers could reclaim VAT paid on many newly purchased items when they left the UK.
As the UK VAT rate is 20 percent on most goods, this could add up to a significant amount. This situation has now changed and this option has been canceled with effect from January 1, 2021, when many changes took place as it was the first day the UK was completely out of the EU after a period of transition.
After a consultation on duty-free and duty-free goods carried by passengers, the Treasury announced that the retail VAT export program will not be extended to visitors to the EU after Brexit, and will also be withdrawn for non-European visitors to Great Britain.
While visitors to the UK will not be able to reclaim VAT on items they purchase and bring home, all non-EU visitors who purchase items in-store and have them shipped directly to an overseas address will be able to recover VAT online. with international tax principles.
This concession should also apply to online shopping, provided that a retailer is set up to handle the process.
We were persuaded by a close family friend to invest in her business using our credit cards. Even before the pandemic, the company was not making any money, so we let it use our credit cards and it maximized them all. The banks are now suing us for payment.
It has been a burden on us for years now as we try to pay off the debt it has put us in. Is there another way out? I still hope that there is something we can do to make it not a serious problem as I have been out of work for five months and only my wife is working. DC, Dubai
When a person takes a credit card, it is for their own use and they are not allowed to give the cards to any third party, including their spouse.
It is against the legal conditions for any card to hand it over to someone else for its use and signing these documents when applying for the card is considered to be an agreement on the specified conditions.
Although the precise wording varies among credit card providers, they will all include a phrase such as “use of the card is limited to the cardholder and their personal use.” It will also say something similar to “the cardholder must not allow any third party to use the card for any purpose”.
The cardholder is solely responsible for all refunds, regardless of whether they have authorized someone else to use the cards
This means that DC and his wife have broken the terms of the agreement with the bank and if they find out, they have the right to cancel the card and demand immediate repayment of the outstanding balance.
The cardholder is solely responsible for all refunds, regardless of whether they have authorized someone else to use the cards.
I understand that there is no written agreement in place between DC and the friend regarding the borrowed money, so he will not be able to bring any civil lawsuits against her. Obviously, DC has to ask this woman to pay back what she owes, but he won’t be able to force her.
If payments are not kept on credit cards, banks will take action and once a person misses three payments, they will usually register a police case and may also apply for a travel ban. If there is no way to pay what is owed, DC may consider seeking insolvency if it is eligible.
To file an insolvency claim, a person must owe Dh250,000 or more and be at least 65 days late on repayments. If it is an option, it stops all further action but has consequences and the money still has to be paid back, often by liquidating other assets and property.
The first step should be to contact the banks that are owed money and try to restructure debts to reduce repayments. It is always best to contact the banks before starting any action as this shows a willingness to repay money, which should make negotiations easier.
Keren Bobker is an independent financial advisor and senior partner at Holborn Assets in Dubai, with over 25 years of experience. Contact her at [email protected]. Follow her on Twitter at @FinancialUAE
The advice provided in our columns does not constitute legal advice and is provided for informational purposes.
Updated: September 4, 2021 5:00 a.m.