World Duty Free Opening
The Government has urged shops operating chains in major airports to allow passengers to benefit from the VAT discounts they receive.
Treasury minister David Gauke stressed that the savings shops made through VAT discounts at airports were not used as a way to boost profits – they were supposed to be passed on to customers, he said.
He spoke after the Independent newspaper revealed that many airport stores were asking passengers to present their boarding cards when making a purchase.
The information on these cards are then used to claim VAT relief on sales to travellers leaving the European Union – by travelling to Turkey or Ercan Airport in North Cyprus, for example.
It means that retailers do not pay 20% VAT on goods they sell to customers travelling outside the EU.
The Daily Telegraph reported Dixons Travel charges £619 for an iPhone 6 on the high street. In airport stores it is significantly cheaper, at £593.99, nowhere near the £123.80 VAT saving for non-EU passengers.
A spokesman said: “Dixons Travel follows the standard practice of non-duty free airport retailers in offering one single, great valueprice across products.
“We are not duty free; instead, we offer customers a simple, single price and give them our price promise to beat key online competitors.
WHSmith told the paper that while VAT is not charged on books and magazines, it does not pay the tax on other products when passengers show their boarding passes.
The revelation led to intervention from the Treasury, with Mr Gauke insisting retailers should use VAT relief to benefit customers.
He told the Independent: “The VAT relief at airports is intended to reduce prices for travellers, not as a windfall gain for shops.
“While many retailers do pass this saving on to customers, it is disappointing that some are choosing not to. We urge all airside retailers to use this relief for the benefit of their customers.”
Mr Gauke’s comments come as many Britons leaving the country for summer holidays may be susceptible to the practice.
