Here’s What You Can Do To Avoid Being Ripped Off By VAT Savings At The Airport

Picture: REX/Shutterstock

The Treasury has called on shops to make sure they pass on tax savings to customers who buy goods duty free at the airport.
So what is it exactly have the retailers been doing, and what are your rights when it comes to buying?

How does the VAT exemption work?

Any goods sold to someone travelling outside the EU is exempt from VAT, which stands at 20%.
In theory, this means that travellers will be able to buy goods at a significant discount compared with the High Street.
But of course that only works if the retailers actually reduce their prices accordingly.

So shops have been pocketing the 20% difference?

Not all shops are guilty of this, and not by the whole 20%.

But an investigation by The Independent found that many stores, including the like of Boots and WH Smith, are passing little if any of the tax savings on.

Is this illegal?

No, unfortunately not. Although most customers were led to believe that they were buying goods VAT-free, it is not illegal.

What’s happening now?

Yesterday, Treasury minister David Gauke told shops that VAT relief was meant to benefit customers, not company profit margins.

He told The Independent: “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.”

What can I do about this?

If you’re travelling, you can join the growing number of people refusing to show their boarding pass when buying goods at the airport.

Most of us had believed this was a required security check, but it actually just helps the shops verify whether you are travelling outside the EU and avoid VAT, you have no legal obligation to do so.

How have the shops responded?

Many shops have been implicated, but much of the focus has fallen on Boots and WH Smith.

Boots admitted that it did claim back some VAT for non-EU passengers but stressed it had broken none of the rules set out by the Government.

However, WH Smith has taken a different tack and simply said it would not be possible to implement a pricing system at the till which allowed it to charge travellers from EU and non-EU destinations differently.