17 AUGUST 2015

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Article from BTNews 17 AUGUST 2015

COMMENT: Airports and VAT

Headline reports in national newspapers and TV suggest that some airport airside shops are overcharging travellers, as the media put it, ‘Keeping the VAT’.

In fact it is not as simple as that but it has emerged that the system of asking to see your boarding card has no legal validity. Certainly at UK airports passengers to all destinations mix together in the so-called ‘Duty Free’ area with goods purchased chargeable for tax purposes at different rates.  For UK domestic and EU flights you pay full wine and spirits duty, plus VAT.  For all others you do not. The price is down to the retailer. The purchase is up to the traveller.  You can always buy the goods before or afterwards 'landside' but if you are hungry, it is true, you have little choice.

Luton is a good example of what one might call ‘mixed mode’ departures. 

The North London airport offers flights to the Channel Islands, Switzerland, Israel and the United States, all outside the EU.  Luton Airport Duty Free ‘drinks’ shop, run by Aelia, highlights the different final prices and is to be complimented.

An investigation by  The Independent  showed many retailers did not pass any of the savings to customers.  The newspaper found Boots were one of the worst offenders, charging customers the same price for airport products as it does on the High Street.

A Boots spokesman confirmed airport store staff are asked to request boarding cards to "ensure accurate reporting of VAT" but said it was not compulsory.

"The HMRC and airports accept that this is a general practice for all retailers located within airport terminals," they added.  Boots were found to have reclaimed VAT without passing savings on to customers.  Other retailers 'named and shamed' included Dixons Travel and WH Smith.

A Dixons spokesman said: "We are not duty free.  We offer customers a simple, single price and give them our price promise to beat key online competitors."

WH Smith claimed pricing items differently in airports was a "practical impossibility".  This of course is rubbish as pointed out above. 

In defence of Boots they produce easily the freshest and best value sandwiches at any airport, which of course are not subject to VAT (‘takeaway’ for domestic flights.)

Airports require to monitor their tenants to ensure fair value, but it is up to shops not to rip off customers, particularly those from overseas who do not understand British retailing. 

If your flight is within the EU no boarding pass is required and you can demand a VAT receipt.

If your flight is outside the EU (where applicable) VAT needs to be deducted from the price assuming the passenger has shown his boarding card. This should be made very clear to passengers at the check-out point.  Staff should ask the customer where they are travelling too.  Taking off the tax at an electronic sales point is very easy.

BTN’s advice.  Refuse a boarding pass unless you want to claim the VAT and Duty back at the sales point.  It will actually speed things up.

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Caroline M, UK

Well having worked at an airport (airline) and travelled abroad all my life I did not know this. I have also been made to run across the terminal before to get my boarding pass from my companion before I was able to buy my sandwiches. Infact multiple times WASTED at tills / bars.. So I for one will be REFUSING from now on!!


David Hurst, West Sussex, UK

Having worked in airports for 16 years and in other parts of the industry for the rest of my working life, it has been a rare summer when some paper or broadcaster hasn't 'exposed' the 'rip off' of duty free. Frightfully tedious, old chap. The really creative staff must be on holiday.


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