As reported, last Friday, the UK Exchequer Secretary to the Treasury, Kemi Badenoch MP released a Written Ministerial Statement announcing the rules which will apply to goods carried across borders by passengers travelling to and from Great Britain to countries outside of the United Kingdom at the end of the Brexit transition period, i.e. from 1 January 2021.
“The proposal from the United Kingdom to remove VAT relief from sales to international passengers leaving the UK poses a threat to us all,” said Nigel Keal, President of the ETRC.
“VAT free sales are a cornerstone of the duty and tax free industry. If adopted, this proposal would dismantle the framework upon which our industry operates, and eventually threaten the viability of the entire aviation ecosystem.”
While Keal says that ETRC welcomes the return of duty and tax free on excisable products, the majority of products that are sold in the UK are not excisable, and through the relief provided on VAT for those sales, “we have seen the establishment of a global industry,” he said.
REMOVING AN ‘ESSENTIAL BUILDING BLOCK’
“Removing this essential building block could cause irreparable harm to our industry, especially if replicated in other countries.
“In addition to our retail members in the UK, categories such as Perfumes and Cosmetics, Electronics, Confectionery, Souvenirs and high-end luxury goods, will immediately suffer should this proposal enter into force.”
ETRC says it will be working closely with the industry in the UK to respond to the threat and impress upon the UK Government the potential consequences of this policy.
“The primary lobbying campaign in the UK will be led by the UKTRF. We therefore urge the industry to get behind the UKTRF and to make their voice heard with the British government,” concluded Keal.