TRBusiness returns to BBC to clarify VAT policy

By Charlotte Turner |

Char-on-BBC-Breakfast-2017-leadOn Friday 17th March, TRBusiness was invited back on to the BBC Breakfast news programme to discuss the practices of airport retailers in the UK, and more specifically the VAT savings customers can benefit from at many UK airport stores.

 

This follows the story published by Deputy Editor, Luke Barras-Hill on the decision by Boots to apply VAT savings to purchases costing £5 or more for passengers travelling outside the EU.

 

Boots has therefore re-introduced boarding pass checks at 29 airside stores in its UK airport’s network, in line with HM Revenue and Customer requirements.

 

The pharmacy and convenience store chain has followed in the footsteps of WHSmith which made a decision to pass on VAT savings to its customers on goods over £6 last year, prompting TRBusiness magazine’s first appearance on BBC Breakfast last August.

 

ONLY FOR THOSE TRAVELLING OUTSIDE THE EU

When last on the show (and on Friday morning) TRBusiness reinforced the fact that all airside airport retailers at UK airports can claim back VAT on goods sold to passengers travelling outside of the EU at the current rate of 20%.

 

 

The resistance by some retailers not to then pass this saving back to those same customers has caused consternation for many and has also resulted in retailers receiving harsh criticism.

 

To help counter this and to clarify pricing policies to consumers, in September last year the UK Travel Retail Forum (UKTRF) announced that 40 UK airport retailers had signed up to a voluntary Code of Practice aimed specifically at ‘greater transparency’ for customers on how VAT relief benefits apply to tax free purchases.

 

The code also requires retailers to provide ‘a clear explanation to all customers’ on how the VAT benefit is used, plus when and why passengers are required to present their boarding passes.

 

The UKTRF was able to update TRBusiness on the situation as it stands today, and issued this statement [these comments were also issued to the BBC]:

 

MORE RETAILERS SIGN UP TO CODE

“Six months ago the UK Travel Retail Forum (UKTRF) and the Airport Operators Association (AOA) launched a voluntary Code of Practice (CoP) to ensure greater transparency in how airport retail customers benefit from VAT relief.”

 

Char-Turner-BBC-Breakfast-2017The UKTRF has pointed out in the past that the majority of UK airport retailers do already pass on VAT savings to customers. TRBusiness understands that list includes Next, Fat Face, Harrods, John Lewis, Ted Baker, Cath Kidston, Zara, SuperDry and obviously Boots and WHSmith.

 

“Airport retailers have embraced the Code, ensuring travellers can continue to shop at UK airports confident in the knowledge that the savings resulting from the VAT relief concession are passed on to them,” the UKTRF continues.

 

The forum also told TRBusiness that as over 40 companies have signed up – including the high volume retailers – the signatories must now account for close to 90% of airport retail sales.

 

One of these is Next, which was able to confirm its practices to TRBusiness this morning too.

 

“I can confirm that, for all Next airport stores in the UK, airside store prices are all discounted to VAT free prices (when compared to the high street selling prices),” said a Financial and Corporate PR spokesperson from Next plc.

 

“The boarding card is evidence that the traveller is entitled to enjoy VAT free shopping. If the traveller is not entitled to VAT free, then Next have to pay VAT out of the discounted price.”

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