Shoppers' duty-free limit rises to £1,000

Holidaymakers who indulge in shopping sprees while abroad will be able to bring home duty-free goods worth £1,000 if the Chancellor gets his way.

Gordon Brown has written to the European Commission asking its permission to raise the allowance on duty-free goods brought into the UK from outside the EU from £145 to £1,000. This excludes wine, spirits, tobacco and perfume.

He said the £145 limit was out of date following the advent of low air fares and the cheap exchange rate with the US dollar, which has caused a flood of transatlantic bargain hunters. Shoppers can pick up clothes and electronic goods for up to 30 per cent less than in the UK.

Mr Brown's letter says: "A £1,000 limit would better reflect modern shopping habits and would help Customs authorities to focus their efforts on large-scale smuggling."

Stephen Crampton of Which?, the consumer magazine said: "The £145 limit was fixed 11 years ago and is no longer appropriate. You have to pay tax and duty on all of your purchases, not just on what is over the limit. This means that Customs officers have to fine people just for shopping, rather than catching real criminals like drug smugglers. But the Chancellor doesn't appear to be including goods bought from outside the EU over the internet. The duty-free allowance here is a miserly £18."

Every EU member state will have to agree to the change for it to become law.