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Concerns over allocation of UK airport retailers’ VAT relief savings

David Gauke, financial secretary to the British Treasury, has voiced his concerns over the conduct of retailers who take advantage of the airport VAT relief initiative without passing the savings onto passengers.

Many British travelers were surprised to learn that the reason for presenting their boarding pass at airport retail counters is because the operator receives a 20% VAT exemption for all products sold to passengers traveling outside the EU. These savings are then supposed to be passed down to passengers although several retailers have been accused of pocketing the difference.

A report by The Independent newspaper names Boots and WHSmith as being among the retailers who do not pass on the savings to passengers. The report also claims that duty free stores use the initiative to boost alcohol sales.

According to the report, Gauke said, “The VAT relief at airports is intended to reduce prices for travelers, 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.”

To read more from the report by The Independent click here.

August 12, 2015


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