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Calls To Make It Illegal To Show Boarding Pass At Airport Shops

The government should make it illegal for airport shops to keep VAT savings for themselves rather than passing them on to customers, the Retail Ombudsman has said.

It follows news that some airport shops are reclaiming VAT relief intended for shoppers flying to non-EU countries after checking their boarding passes.

Ombudsman Dean Dunham said there was little he could do as the law stands. Retailers have said they are following government rules. Passengers are asked to show passes so retailers can identify who is flying to non-EU countries and avoid paying 20% VAT on customers’ purchases.

Treasury minister David Gauke said the relief was intended to reduce prices for travellers, not be a windfall gain for shops.

Boots, one of the retailers which said it claimed back some VAT for non-EU passengers, has since said it will no longer ask customers to show their boarding passes while it undertakes “a longer term review of the situation”. Dixons said it was reminding staff that seeing the boarding passes of passengers was a “request” and not mandatory.

Anyone travelling outside the 28 countries of the European Union (EU). Travellers within the EU or the UK have to pay existing rates of duty and VAT.
Do you have to show a boarding pass? If you are buying cigarettes or alcohol in a duty free shop, you are legally obliged to show your boarding pass, to prove you are travelling outside the EU. If you are buying other goods – say books, snacks or cosmetics – you are not obliged to show your pass.

Mr Dunham, a barrister who was appointed in December to resolve disputes between retailers and customers, told BBC Radio 4’s PM programme: “Government needs to make this a law. “They need to say to the retailers in airports ‘you must’, not ‘we want you to’. Ministers must say “you must pass on this relief, and you must make it very clear to your shoppers what it is they’re getting for their money”, Mr Dunham added.

A Number Of Retailers Have Responded To The Criticism:

Boots said it had claimed back some VAT for non-EU passengers in accordance with government rules but would no longer ask to see boarding passes

WH Smith said it would be impossible to have a pricing system which distinguished between travellers to EU and non-EU destinations

Dixons asks customers to show boarding passes when making purchases but says this is only a request and has reissued this guidance to staff. If some of its products, such as laptops, are found cheaper elsewhere it will pay customers double the difference, it says

John Lewis said it did not charge VAT and clearly labelled the price difference

Next offers VAT-free prices on all its goods and pays the VAT itself when people are not entitled to the discount

A Harrods spokesman said its airport stores sell all their products VAT free

World Duty Free Group said in its case it was a legal requirement, specified by HM Revenue and Customs (HMRC), to ask all its customers to show their boarding passes. It said it uses the information to ensure any applicable customs, excise duty and VAT is fully accounted for and that it does not allow it to reclaim any tax from HMRC.

Customers are not legally obliged to show their passes when buying goods at the airport, except when buying cigarettes or alcohol in a duty free shop.
But the Independent newspaper’s travel editor, Simon Calder, said retailers were often giving “all kinds of stories” to explain why passengers should show them, such as for security reasons, which he said was “complete tosh”. Mr Dunham said it was difficult for him to do anything because it was rare for retailers to say something was entirely VAT-free.

He said many people were also confused about what duty-free means.
“They are thinking that because shops are duty-free, that it also includes VAT on all occasions, and that all of the shops in the airport are duty-free, which is not the case,” he added.