Airport retailers have vowed to be more transparent when it comes to VAT savings. Last summer it emerged that airside retailers were requesting to see customers boarding passes in order to benefit from the 20% tax saving from people flying to outside the EU without necessarily passing the saving onto the customer.
Passengers are not legally obliged to show their boarding passes to all airside retailers, only duty-free specific shops. However, many chains were using it to claim back the VAT without passing the savings on to the customers.
the UK Travel Retail Forum (UKTRF) and Airport Operators Association (AOA) have signed up dozens of shops including World Duty Free, Boots and Harrods to launch a voluntary code of practice to be more transparent about how they are using the VAT savings. A statement from UKTRF and AOA, which has been working with the tax office, said that retailers will have “signage in-store and on their website showing how the VAT benefit is being reflected in prices”.
This issue is expected to be come more significant once Britain leaves the EU, although this will also depend on the results of a Government report on airport VAT currently being prepared by the treasury.