TRBusiness’ petition to save tax free sales is edging closer to a government response after amassing more than 7,000 signatures in the two weeks since launching.
The campaign continues to build momentum on an hourly basis and at the time of writing the number of signatories exceeded 7,270.
At 10,000 signatures, the government will issue a response. Only British citizens or UK residents can sign the petition.
The petition, aimed at overturning the government’s ‘ill-timed’ decision to abolish the extra-statutory concession (ESC) at UK airports on all airside products aside liquor and tobacco and the VAT-RES scheme for international tourists from 1 January, has received fervent support from across industry.
To date, the UK Travel Retail Forum (UKTRF) – which is leading the advocacy push in the UK – European Travel Retail Confederation (ETRC), Tax Free World Association (TFWA) and Duty Free World Council (DFWC) have backed the petition.
There are widespread fears that the move, which surfaced following a consultation response in September, could put at risk thousands of jobs while causing major harm to beleaguered businesses in the UK’s retail and aviation sectors as the economy fights to rebound from Covid-19 [while still suppressed and not yet at pre-pandemic levels, it is worth noting though that UK GDP grew by 15.5% in Q3 following data released this week by the Office for National Statistics – Ed].
[to read the full background to the petition and its objectives, click here].
Should the decision stand, the industry says UK airports would be placed at a substantial disadvantage compared to European and international airports while simultaneously hitting travellers’ pockets.
HM Treasury and HM Revenue & Customs have raised concerns over the application of the ESC, namely that the benefits were not being passed onto consumers and the system was ‘not consistent with international tax norms’.
It has also said that extending VAT-RES to the EU would be a ‘costly’ procedure.
Reacting to TRBusiness’ petition, Duty Free World Council (DFWC) said: “The Duty Free World Council fully supports industry efforts calling on the UK government to reverse their proposal to remove VAT free sales to EU-bound travellers from the UK, and furthermore to remove existing VAT relief from sales to passengers leaving the UK to travel to international destinations from 1 January next year.
“The DFWC supports the TRBusiness initiative to launch a petition to ‘Keep tax-free sales at airports and the VAT Retail Export Scheme’ and encourages all industry professionals, their families and friends, who are either British citizens or UK residents to sign the petition.”
The DFWC continued: “This decision puts the UK out of step with travel retail systems around the world and will discourage tourists from visiting the UK and ensure that tax free purchases, from beauty through to fashion, that would previously have been made at British airports by departing passengers, will be made overseas instead.
“It will put UK airports and travel retail at a substantial disadvantage against their European counterparts, and against ferries and airlines which will be able to offer tax-free sales.
“A report by specialist consultancy York Aviation estimates the decision will cost the UK economy £2.1bn in GDP and put at risk nearly 20,000 jobs, at a time the industry needs substantial government support not further challenges.
“Tax free sales are a cornerstone of the global duty and tax free industry. Globally they account for 70% of sales – in the UK they account for nearly 80% of airports’ sales. If adopted, this proposal would dismantle the framework upon which our industry operates and will pose a severe strain on the entire UK aviation ecosystem with repercussions that could reach far beyond the UK.
“This is why the DFWC urges industry colleagues, families, and friends to sign the petition – it has already garnered over 7,000 signatures and once it reaches 10,000 the government will have to respond.”
The ETRC, which is pursuing a separate and important campaign with ACI Europe to persuade EU lawmakers to permit duty and tax free sales on arrival, has communicated the petition among its members.
“The initiative from TRBusiness to launch a petition asking the UK government to reconsider its damaging proposal to remove tax free sales on non-excisable products at airports and the VAT Retail Export Scheme is very much welcomed,” commented Julie Lassaigne, Secretary General, ETRC.
“If implemented, this decision will have a disastrous and long-lasting impact on an industry which is already desperate by the consequences of the Covid-19 crisis. The British government needs to hear the voice of the people behind the lost jobs, and we would encourage those eligible to consider signing the petition.”
In sharing TRBusiness’ petition via its social media accounts, TFWA says it ‘wholeheartedly’ supports the industry lobbying campaign spearheaded by the UKTRF.
TFWA said via LinkedIn: “We encourage all brands and retailers to support the campaign, and if you are based in the UK, you can sign the petition launched by TRBusiness.”
CONSTITUENTS SPEAK; MPS REACT
Marco Passoni, Senior Executive VP at TW.O Partners and a signatory of the petition commented: “The UK’s duty free market actively benefits brands, retailers and consumers, as well as the wider UK economy.
“This decision will lead to lost tourist spending and massive job losses, to no obvious advantage, just as our industry is showing strong signs of recovery from the pandemic.
“We must all do all we can to encourage our representatives to rethink this decision as soon as possible and we must act now.”
In addition to individuals from travel retailers such as Dufry North America that have rallied behind the petition, TRBusiness has also witnessed engagement between petition supporters and UK Members of Parliament.
This has included dialogue with Crawley MP Henry Smith, who launched the All-Party Parliamentary Group for the Future of Aviation earlier this year.
In his capacity as Chair, he has written to the Chancellor Rishi Sunak calling on government to reconsider the axing of tax free sales to prevent further damage to an aviation and tourism sector left reeling by the damaging impacts of Covid-19.
Another of the petition’s signatories is Ian Moore, Managing Director for Paramount Design & Display Ltd that works with well-known beauty brands in the UK airport environment.
Off the back of the petition, Moore contacted Chipping Barnet MP Theresa Villiers to highlight dismay at the government’s stance.
She said a number of constituents had been in touch on the matter and their ‘very serious concerns’ had been raised with the relevant minister.
To date, the government does not appear to have given any ground on the issue since issuing a follow-up technical note in October explaining in more detail the reasons behind the decision.
In a response from the Treasury seen by TRBusiness, the department highlighted the extension of duty free sales to EU-bound passengers for the first time in 20 years as a ‘significant boost’ to all airports and international rail terminals in England, Scotland and Wales plus smaller regional airports and rail hubs that have not been able to offer duty free in the past.
It added that personal allowances will be introduced for passengers entering Great Britain from the EU and alcohol allowances would be significantly increased.
“The recent announcement considered the range of views submitted as part of this consultation,” read a letter. “HM Treasury ministers balanced these against a range of factors, not least the government’s competing policy objectives.”
This week, another volley of retailers called on the Chancellor to instigate a u-turn on removing VAT RES in UK shops to prevent a potential hit worth millions of pounds in international tourism revenues.
The 11 brands in question included Gucci, L’Oréal Luxe UK and Tiffany & Co.
Stay close to TRBusiness for more on the petition…