The airport duty-free VAT scam
Retailers who ply their trade in Britain's airports are being asked to come clean about the millions of pounds in VAT discounts they're making on duty free items, which of course, saves them loads of money which they're not passing on in savings to customers.
So what's this about? Well, have you ever wondered why airport shops ask to see your boarding cards at the checkout? Well, this is not a legal requirement, but rather, the information the retailers are getting off them is so they can avoid paying 20% VAT on everything they flog to those travelling outside the EU.
That Paul Lewis fella says: "I think the problem here is that the retailers are not being straight with the public. They are asking to see passengers’ boarding cards but not telling them that this is so they can make more money by not paying the VAT on what they’re selling. What of course they should be doing is passing on the savings that they make to the passengers who are travelling outside Europe."
"The problem is, though, that they have got a captive audience," he continued.
Of course, airport shops are a swizz and 'duty-free' hardly ever means 'noticeably much cheaper'. All it really means is that the retailers themselves are not paying duty. In the case of Boots, their airport stores charge customers all over the country the same amount as they charge in London stores, even though they avoid paying 20% tax on everything they sell to those travelling outside the European Union.
HMRC have said that there's no need for stores to pay VAT on goods sold to passengers leaving the UK: "Duty free shops may treat the sale of goods to passengers intending to take them to non-EU destinations as zero rated exports, provided they retain suitable evidence such as by scanning the boarding card."
"There is nothing in VAT law to require the production of a boarding pass to purchase goods in airport shops, but without such evidence the supply cannot be zero-rated as an export."
"HMRC cannot comment on the pricing policies of individual retailers."