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Airport shops urged to pass VAT savings on to customers Airport shops urged to pass VAT savings on to customers
(35 minutes later)
Airport shops are being urged to pass on VAT savings made in some cases when customers show boarding passes.Airport shops are being urged to pass on VAT savings made in some cases when customers show boarding passes.
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.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 VAT relief at airports was intended to reduce prices for travellers, not be a windfall gain for shops.Treasury minister David Gauke said VAT relief at airports was intended to reduce prices for travellers, not be a windfall gain for shops.
The practice is not illegal, but has been challenged by some passengers. Retailers said they followed government rules.
The Independent newspaper has claimed that thousands of people are now refusing to show their boarding passes as part of a "grassroots rebellion".The Independent newspaper has claimed that thousands of people are now refusing to show their boarding passes as part of a "grassroots rebellion".
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.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.
The newspaper's travel editor, Simon Calder, told BBC Radio 5 live: "If you take a £6 bottle of sun cream the VAT element is £1.The newspaper's travel editor, Simon Calder, told BBC Radio 5 live: "If you take a £6 bottle of sun cream the VAT element is £1.
"So if you fly to Greece, the retailer pays that to the government, if you fly to Turkey and the retailer can find out, then it goes straight into their pockets - nothing illegal about it at all but I will always challenge it.""So if you fly to Greece, the retailer pays that to the government, if you fly to Turkey and the retailer can find out, then it goes straight into their pockets - nothing illegal about it at all but I will always challenge it."
He said "all kinds of stories" had been given by retailers to explain why passengers should show their boarding passes, including that it is for security reasons, which he said is "complete tosh".He said "all kinds of stories" had been given by retailers to explain why passengers should show their boarding passes, including that it is for security reasons, which he said is "complete tosh".
Airport shopping: What are the rules?Airport shopping: What are the rules?
Who is entitled to VAT savings?Who is entitled to VAT savings?
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.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?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.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.
Read more from the BBC's personal finance reporter Brian MilliganRead more from the BBC's personal finance reporter Brian Milligan
Mr Calder added: "They [retail staff] have just been told 'you have to ask for a boarding pass', which is why you get nonsense like when you buy a book or a magazine or newspaper and there is no VAT anyway, and they still want to know where you are flying to - even though it doesn't make the slightest bit of difference to anybody." Mr Calder added staff were told to ask to see boarding passes even for goods where no VAT is paid, such as books or magazines.
Money Saving Expert founder Martin Lewis said: "People withholding their boarding passes will force companies to take note and eventually take action." Money Saving Expert founder Martin Lewis told BBC Radio 2's Jeremy Vine programme travellers withholding their passes would force companies to "take note and eventually take action".
Mr Lewis told BBC Radio 2's Jeremy Vine programme that travellers should ignore claims by retail staff that showing a boarding pass is obligatory.
"You're not protecting the sanctity of Britain by giving them your boarding pass, you are enabling the commercial company to get a reduction on its tax bill," he said."You're not protecting the sanctity of Britain by giving them your boarding pass, you are enabling the commercial company to get a reduction on its tax bill," he said.
Labour's shadow transport minister Gordon Marsden said it was "simply unacceptable" that some retailers were "taking advantage of this relief". Labour's shadow transport minister Gordon Marsden said it was "simply unacceptable" that some retailers were "taking advantage of this relief" and said the government needed to ensure customers were being treated "fairly".
He added: "The government needs to ensure that customers are being treated fairly so that it's not just retailers who can benefit from the relief."
'Infuriating''Infuriating'
A spokesman for Boots, one of many retailers who operate in UK airports, said the company did claim back some VAT for non-EU passengers but added that this was in accordance with the rules set out by the government. A spokesman for Boots, one of many retailers who operate in UK airports, said the company did claim back some VAT for non-EU passengers but added this was in accordance with the rules set out by government.
WH Smith said it would be impossible to have a pricing system which distinguished between travellers to EU and non-EU destinations.WH Smith said it would be impossible to have a pricing system which distinguished between travellers to EU and non-EU destinations.
But one man, who said he was a former WH Smith manager, told the BBC it would be simple to apply a discount for people showing boarding cards for non-EU countries.
He said the VAT saving in the store he worked in was estimated to be more than £200,000 a year.
A Harrods spokesman said its airport stores sell all their products VAT free.A Harrods spokesman said its airport stores sell all their products VAT free.
World Duty Free Group said it was a legal requirement, specified by HM Revenue and Customs (HMRC), to ask all its customers to show their boarding passes.World Duty Free Group said 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 World Duty Free to reclaim any tax from HMRC. 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.
Jo Evans reminded travellers retail workers like her did not make the rules, tweeting: @Gatwick_Airport spare a thought for us retail workers when arguing about showing boarding passes to buy something, we don't make the rules!
Earlier this year, BBC Radio 4 listener David Owen questioned why he had to show his boarding pass at airport shops.Earlier this year, BBC Radio 4 listener David Owen questioned why he had to show his boarding pass at airport shops.
He said: "If I buy a sandwich in a railway station, the cashier doesn't insist on knowing where I am going, so why am I asked to produce a boarding card by making the same purchase in the airport departure lounge?"
His views have been echoed by other passengers.His views have been echoed by other passengers.
Jo Barnett, from Sittingbourne in Kent, said: "We questioned why we were being asked to show our boarding card while at Gatwick.Jo Barnett, from Sittingbourne in Kent, said: "We questioned why we were being asked to show our boarding card while at Gatwick.
"The man told us he didn't know, but he could not process the sale without scanning the boarding pass.""The man told us he didn't know, but he could not process the sale without scanning the boarding pass."
Steve Howlett, from Southend-on-Sea in Essex, said: "This rather infuriates me. The prices at three London airports I have been travelling from within the last five years have prices that far exceed equivalent goods available on the High Street, or in supermarkets."
What is your reaction to this story? Have you refused to show your boarding pass when buying goods? You can share your comments by emailing haveyoursay@bbc.co.uk.What is your reaction to this story? Have you refused to show your boarding pass when buying goods? You can share your comments by emailing haveyoursay@bbc.co.uk.
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