12th August 2015
Airport retailers are being pressured to pass VAT savings onto shoppers as many stores are pocketing the extra cash when customers show their boarding passes.
Travellers are typically asked to show their boarding passes at duty-free shops when they are making a purchase but are under no legal obligation to do so. However when they do show their pass, shops can avoid paying 20% VAT on purchases made by those travelling outside the European Union.
The Independent has been campaigning against the practice and as a result thousands of flyers have reportedly been rebelling and are now refusing to show retailers their boarding cards.
It reported that since it exposed this trend, consumers have taken to social media declaring that they will now refuse to show their boarding cards at airport stores in a bid to put an end to the profiteering.
Speaking to the newspaper Financial Secretary to the Treasury, David Gauke, who wants to put an end to the custom said he was disappointed that some of the UK’s top retailers were pocketing millions of pounds in VAT discounts without passing the savings to customers.
He said: “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.”
A Boots spokesperson told the BBC said the company did claim back some VAT for non-EU passengers. They added that this was in accordance with the rules set out by the government.
However WH Smith said it would be impossible to have a system which distinguished between travellers to EU and non-EU destinations.
Speaking on BBC Radio 2 to Jeremy Vine, said: “What we need to do, if we want to get them to change their policy, is quite simple: those of you who are going away this summer outside the EU, when they ask for your boarding pass, say, ‘No, sorry, I’m not going to give it to you: it only gives you a reduction. Unless you pass that on to me I’m not going to give it to you. Please tell your bosses.’”