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Pass on sales tax savings to passengers, UK govt tells airport retailers
August 12, 2015 / 1:49 PM / 2 years ago

Pass on sales tax savings to passengers, UK govt tells airport retailers

LONDON, Aug 12 (Reuters) - The British government has called on airport retailers to stop pocketing sales tax discounts meant for passengers after a newspaper investigation into the practice prompted a backlash from consumers.

Most airport retailers ask passengers to show their boarding cards at the checkout when paying for goods. While security is often cited as the reason, the Independent newspaper reported stores use the information to avoid paying the 20 percent Value Added Tax (VAT) on goods headed outside the European Union.

“The VAT relief at airports is intended to reduce prices for travellers, not as a windfall gain for shops,” David Gauke, Financial Secretary to the Treasury, told the newspaper.

“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.”

On its front page on Wednesday, the Daily Mail newspaper told its readers: “Beat airport shop VAT rip-off, Don’t Show Your Boarding Pass!”

While the practice of asking for boarding passes is not illegal, the newspaper reports have prompted anger among passengers, who have taken to social media to say they will refuse to show them in future.

One Twitter user, Simon Gershenson, messaged high street chain Boots saying “@BootsUK won’t be showing you my boarding pass again, rip off Boots.”

A spokeswoman for Boots, owned by Walgreens Boots Alliance , said its airport staff were asked to request and scan boarding cards in order to ensure its accounting records were accurate but that it was not compulsory.

“Our pricing in airport stores is consistent with our London prices and VAT is not taken into account when setting prices of products,” she said. “Any of our customers that do not wish to share this information can shop with us without the boarding card being scanned.”

A spokesman for WH Smith, also named by the newspaper as not passing on the saving to customers, said operating a system of dual pricing would be a “practical impossibility”.

“Any VAT relief associated with the identification of customers travelling outside of the EU is reported in accordance with UK legislation, and any relief obtained is reflected in our single price and extensive promotional offers provided to all of our customers,” he said. (Additional reporting by James Davey; editing by John Stonestreet and Gareth Jones)

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