When you shop Tax Free, it means you are getting the VAT (Value Added Tax) deducted from the purchase price. The tax is used for social purposes in the UK and as a foreign resident you can claim this tax back and hence, shop Tax Free.

How high is the VAT rate in the UK?
It is 17,5% on all goods. It means that all prices include a VAT rate which hence corresponds to 14,9% of the total selling price.

Example: Price of good including VAT is £120
The VAT is calculated 120*14,9% = £17,88

Is there a minimum amount when shopping Tax-Free in the UK?
In the UK the minimum amount is £30 - £70 depending on the store you are shopping in.

Can I use the UK-Refund system for all my expenses?
No, you can only use it for goods which you export out of the country. Services are hence not included, nor does food, which you consume during your stay. 

The 3 Golden rules concerning Tax Free shopping
-The correct form must be completed at the point of sale
-The customer must leave the EU within 3 months from purchase
-The customer must spend the minimum amount set by the store