Duty free and the airports

UK Chancellor of the Exchequer George Osborne has launched a review into airport shops that fail to pass on VAT savings following reports in national newspapers and TV suggesting that some airport airside shops are overcharging travellers, as the media put it, ‘Keeping the VAT’.   See COMMENT 17/8/15 

According to a statement by the Chancellor, “Currently, some airside retailers are keeping up to an estimated 50p of every £1 of potential VAT savings instead of passing those savings on to shoppers.”

Announcing the review the Chancellor said: “VAT relief at airports is intended to cut prices for those travellers – not be a windfall gain for shops.

“But many people could be paying over the odds for their purchases because the Government’s VAT concession isn’t passed on.

“This is simply unacceptable.  I have launched a review to make sure that this VAT relief benefits those it’s intended for – consumers – whatever time of the year they are travelling.

“This review will consider ways to ensure prices reflect VAT savings as well as savings on duty.”

The review is expected to be completed in early 2016 and will also cover all other airside shopping taxes.  www.hmrc.gov.uk/manuals/dfsmanual/index.htm

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