EU member states will be able to sell duty and tax free to UK-bound passengers from 1 January.

Travellers from Ireland to the UK are set to enjoy duty and tax free purchases at ports and airports from 1 January, TRBusiness has learned.

This publication has it on good authority that the Irish government recently gave the green light to proposals, although these are understood to hinge on the 2020 Brexit Omnibus Bill being passed into law by the Oireachtas (Ireland’s national parliament).

Should this occur, it would represent a significant breakthrough for the lobby after concerns surfaced last year regarding proposed amendments to the bill that focused on preserving the ‘status quo’ between the UK and Ireland in the event of a no-deal Brexit.

The development is now understood to give weight to Ireland reciprocating the UK’s policy to enable duty free shopping and surfaced via an update on Ireland’s Department of Foreign Affairs website.

Julie Lassaigne, Secretary General, ETRC.

‘NOT ANTICIPATING CHANGES’

“The Irish government is in the process of passing its 2020 Brexit bill which will ready the country for the change to its relationship with the UK,” commented Julie Lassaigne, Secretary General, ETRC.

“The Bill as published, will allow for duty and tax free sales for all travellers to the UK, which is in line with EU legislation as confirmed by the European Commission to ETRC several times during the Brexit process.

“Obviously the Bill has not been fully adopted yet, but we are not anticipating any last minute changes.

“This is really good news as the Irish government were initially very sceptical of the impact of duty and tax free and thought that it could present a threat to government finances.

“Thankfully the industry in Ireland, which joined together under the banner of the Irish Duty Free Alliance, was able to show the clear benefits of duty and tax free sales to UK passengers. ETRC was delighted to assist this effort.”

It is gathered that Ireland’s Finance Bill, which has been published and is at its second stage reading, places no added restrictions on duty free sales between Ireland and the UK post-Brexit.

A spokesperson from Ireland’s Tax and Customs declined to comment at this time but a response is anticipated in due course.

In September, the Irish government issued its ‘Brexit Readiness Action Plan’ in preparation for the end of the transition period.

The Loop Duty Free at Dublin Airport. Source: daa.

UK TREATED AS ‘THIRD COUNTRY’

Within the plan, it pointed to the possible operation of duty free sales and the VAT Retail Export Scheme between Ireland and the UK (excluding Northern Ireland) when the UK assumes ‘third country’ status after the transition period.

The Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2019 (Brexit Omnibus Act) was enacted on 17 March 2019 in view of a possible no-deal Brexit.

However, many of the provisions did not commence as the withdrawal agreement was ultimately negotiated and entered into force.

In May, the government approved the preparation of the scheme for the new Brexit Omnibus Bill that is being brought before the Oireachtas.

The IDFA has spoken previously of the sizeable economic opportunity arising from a post-Brexit return of duty free sales on routes between the UK and Ireland, suggesting the restoration could provide a €45m boost to the domestic economy.

As reported, the UK government announced in September last year that duty free liquor and tobacco sales to EU-bound travellers would activate in the event the UK leaves the EU without a deal.

The European Commission made clear in November that year that travellers entering the UK from the EU were entitled to avail themselves of goods exempt of excise duty.

However, the situation with regards to the sale of airside tax free sales (excluding liquor and tobacco) at UK airports  remains precarious.

The government has come under further sustained pressure this week from embattled retailers to reverse a decision predicted to cause untold damage to the economy.

TRBusiness has launched a petition urging the government to u-turn on the decision, with more than 7,000 signatures to date.