George Osborne calls for airport VAT review, says savings belong with consumers
George Osborne has ordered a review of airport shops over an alleged VAT scandal
Duty free shouldn't be a windfall for retailers
Yesterday the Chancellor said that some retailers were keeping up to an estimated 50p of every £1 of potential VAT savings instead of passing them on to consumers.
This is simply unacceptable
He said: “For families flying out of the UK for a winter getaway airports should be the ideal place to pick up a bargain. VAT relief at airports is intended to cut prices for those travellers – not be a windfall gain for shops.
“But many people could be paying over the odds for their purchases because the Government’s VAT concession isn't passed on.
“This is simply unacceptable. I have launched a review to make sure that this VAT relief benefits those it’s intended for – consumers.”
Osborne is cracking down on duty free
It's not a legal requirement to show a shop your boarding pass
The government urged retailers to slash prices four months ago
The “extensive” review will include all airport shopping taxes in addition to VAT.
Mr Osborne’s announcement comes more than four months after the Treasury urged retailers to cut their prices at airports to reflect the VAT discounts they receive for travellers leaving Europe amid claims that some stores were using the relief to boost their profits.
Many retailers have been asking customers to present their boarding cards – not a legal requirement – so they can claim VAT relief at 20 per cent on sales of supposedly dutyfree goods to travellers leaving the European Union.