The European Commission has formally requested the United Kingdom to amend its legislation to ensure that final customers can get their VAT back in any refund from manufacturers for goods that have reduced in price and bought through a third party (for example shampoo in a supermarket).
Under EU VAT rules, consumers are entitled to receive the VAT back too when they get a refund on goods that are faulty, flawed or do not meet the customer's expectations or the customer returns the goods. However, the current rules in the UK do not allow manufacturers to refund VAT paid at the time of the purchase. On 24 May 2012, the United Kingdom announced its intention to amend its rules in line with EU legislation but it has not yet done so. The Commission's request takes the form of a reasoned opinion. In the absence of a satisfactory response within two months, the Commission may refer the United Kingdom to the EU's Court of Justice.