You do not have to show your boarding Pass to retailers at the Airports

Started by Mavo, August 12, 2015, 09:55:12

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Mavo

 Airport retailers must cut their prices, ministers have said after it emerged that they are pocketing millions in VAT discounts on duty free items by making passengers show their boarding passes at the checkout.

The vast majority of shops in airports demand that passengers present their boarding cards to be scanned at checkouts before paying for goods.

Many passengers assume that the demand is a legal requirement, but the information is actually used by stores to avoid paying 20 per cent VAT on everything they sell customers travelling outside the EU.

Some of Britain's biggest retailers including Boots, Dixons and WHSmith have been accused of failing to pass on the savings to customers. By contrast Harrods sells all its products duty free in its Heathrow stores.

The revelation has prompted a furious consumer backlash, with travellers saying that in future they will withhold their boarding cards to prevent retailers from cashing in.

According to a survey on The Telegraph's website, 88 per cent of people now say that they will refuse to show boarding cards in future - equivalent to 32,759 people.

David Gauke, the Chief Secretary to the Treasury, said that the VAT relief was put in place to "reduce prices for passengers" rather than as a "windfall gain for shops".

He said: "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."

Steve Baker, a Conservative member of the Treasury select committee, said that passengers are being "ripped off". He said that he would like his select committee to investigate.

He said: "Consumers are entitled to expect that tax savings will be passed to them rather than become another addition to the bottom line for companies. I always thought that showing a boarding pass was an official requirement."

A Duty Free shop is seen in Terminal 2 at Heathrow Airport in LondonThe VAT relief is meant to create lower prices for passengers

Boots charges the same for all the products it sells in its airport shops as it does on the high street despite the VAT saving.

A bottle of Nivea Sun Spray, for example, costs £8 which means Boots can reclaim £1.60 from in VAT relief if it is sold to a passenger travelling outside the EU. But rather than cutting the cost of the product, it is simply pocketing the difference.

A spokesman for Boots said: "At Boots UK we believe in offering all of our customers the same great value wherever and whenever they choose to shop with us.

"We are claiming back VAT on a proportion of purchases made by customers flying to non EU destinations in accordance with current VAT rules set by the HMRC. However, showing a boarding card is not compulsory and any of our customers that do not wish to share this information can shop with us without the boarding card being scanned."

Other retailers were found to be offering small reductions in their airport outlets, but still keeping the most of the savings. Dixons Travel charges £619 for an iPhone 6 on the high street. In airport stores it is significantly cheaper, at £593.99, nowhere near the £123.80 VAT saving for non-EU passengers.

A spokesman said: "Dixons Travel follows the standard practice of non-duty free airport retailers in offering one single, great valueprice across products.

"We are not duty free; instead, we offer customers a simple, single price and give them our price promise to beat key online competitors."

WHSmith admitted that while VAT is not charged on books and magazines, it does not pay the tax on other products when passengers show their boarding passes.

A spokeswoman said that a system of dual pricing, in which it shows discounts to travellers going outside the EU, is a "practical impossibility". She said that "any relief obtained is reflected in our single price and extensive promotional offers".

James Daley, founder of consumer campaigners FairerFinance, said: "Airports are littered with 'duty-free' shops and this fosters a myth that it's always cheaper to buy things at the airport.

"But in reality it often isn't any cheaper, and by waiting to make a purchase at the airport, you're limiting yourself to a smaller choice of retailers and items.

"Retailers wouldn't be able to get away with this sleight of hand in the US, because sales tax is not shown on the shelf price, it's added on at the till.

"Including tax in the price generally makes it clearer for UK customers - but it places a greater responsibility on retailers to act responsibly and to be transparent."


Ronaldraps

You are so right xbrpete....Bumping this, as it needs to be seen by those that might help by doing the walk doing something.

Alexmensr

I would have been more into Goosebumps. Because two years, during your first decade of life, is a huge difference.

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