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The Airport VAT Backlash: Are we being Ripped Off?

Travellers are refusing to hand over their boarding cards in airport shops after new information emerged uncovering the real reason behind the procedure, in what has become an airport VAT scandal. Airport retailers such as WHSmith and Boots were forced to admit why stores ask to see your boarding card when making a purchase, and it turns out they do so to avoid paying tax.

This way retailers won’t have to pay 20 per cent VAT on everything they sell to passengers who are travelling outside the EU.

This new discovery has infuriated thousands of passengers who were led to believe that showing your boarding card in an airport shop was the law. Many UK fliers now feel like they have been betrayed by shop assistants who have insisted that they need to produce their boarding card to complete a transaction.

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And new research by The Independent has shown that most of the stores do not pass on any savings to their customers.

Paul Lewis, the consumer affairs expert, believes that the main issue is that businesses have misled travellers.

Customers hand over their boarding cards assuming they are gaining a discount, when in fact it is the retailer making money on the goods they are selling.

One of the biggest culprits is Boots, who are situated in most UK airports, and have openly admitted to claiming back VAT. The franchise have stated that they won’t be changing their policy, and will continue to ask flyers to show their boarding passes even though they expect many to refuse following the anger expressed by dozens of travellers.

A spokesman has stated that Boots is, “claiming back VAT on a proportion of purchases made by customers flying to non EU destinations in accordance with current VAT rules set by the HMRC.”

So, what does this mean for UK flyers travelling outside the EU?

According to a spokesman from the HMRC, “There is nothing in VAT law to require the production of a boarding pass to purchase goods in airport shops, but without such evidence the supply cannot be zero-rated as an export.”

He added: “HMRC cannot comment on the pricing policies of individual retailers.”

Therefore, showing your boarding pass in an airport shop isn’t compulsory, so if you do not wish to produce your pass while making a purchase there is no law in place which states you have to.

The latest…

Treasury ministers are urging retailers to cut their prices following the continued backlash, and believe that the issue should be investigated further.

Steve Baker, a member of the Treasury said Consumers are entitled to expect that tax savings will be passed to them rather than become another addition to the bottom line for companies. I always thought that showing a boarding pass was an official requirement.”

So, if you happen to be boarding a long haul flight to The Caribbean, for example, the question is – will you refuse to show your boarding pass? Tell us in the comments below