Air travellers refusing to show boarding passes at airport shops after news about VAT avoidance

Richdog

Richdog

Richdog

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I was pretty damn annoyed reading this article. Apparently the irritating boarding card check that some airport shops perform upon purchasing is not some extra mandatory layer of security like I'd always assumed, but is instead a way to check if they can get VAT savings for people travelling outside of the EU. Those savings are then of course not passed on to the customer travelling to those destinations!

Article here: http://www.independent.co.uk/news/u...d-by-stores-to-avoid-paying-vat-10449107.html

Air travellers are refusing to show their boarding passes at airport shops after The Independent revealed that the information is used by stores to avoid paying VAT - without passing on the discount to customers.

The grassroots revolt comes amid mounting anger at the tax ruse - which was exposed by this paper on 8 August.

Passengers who had assumed they were legally obliged to comply with requests to present boarding passes when paying for goods in airport shops expressed astonishment that they were in fact being inconvenienced to boost retailers’ profits.
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Another article here: http://www.independent.co.uk/news/u...assenger-rebellion-gathers-pace-10450819.html

Treasury ministers have demanded an end to rip-off VAT charges by some airport stores as the grassroots passenger rebellion against the racket gathers pace.

The Financial Secretary to the Treasury, David Gauke, told The Independent he was concerned and disappointed that some of Britain’s top retailers were pocketing millions of pounds in VAT discounts without passing the savings to customers.

The practice, where stores demand that passengers present their boarding cards at checkouts before paying for any goods, was first revealed by this newspaper last week.

The information is used by stores to avoid paying 20 per cent VAT on everything they sell to customers who are travelling outside the European Union. Most of these stores, including Boots and W H Smith, do not pass on the savings to passengers.

The Independent can also reveal the ruse is used by so-called “duty-free” shops to boost their profits on alcohol sales.

If a customer is travelling beyond the EU, retailers do not pass VAT on to the Treasury If a customer is travelling beyond the EU, retailers do not pass VAT on to the Treasury.

Mr Gauke said the intention behind VAT relief at airports was to help passengers and not to line the pockets of retailers – and called for the practice to stop. “The VAT relief at airports is intended to reduce prices for travellers not as a windfall gain for shops,” he said.
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While it may seem like a minor issue to many, the principle of it really annoys me and it will be interesting to see how the retailers react to this...
 
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On the fence a little here. An epos is going to be ridiculous to set up for all eventualities.

Although I worked for a retailer who had a Gatwick store a few years back and their epos did have a simple, domestic/EU/outside EU prompt at sale.

e: thinking about it (this was several years ago) there was a nightly import of the flight numbers (Gatwick do, or at least did supply this on ftp) and destinations and applied the relevant tax upon entering the flight no.
 
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As I said I don't think its some big conspiracy, just that a lot of epos are limited functionality.

We were fortunate that our guys coded in house and jumped at the chance to charge a lot of money for the custom work.

Half the time the provided flight data wasn't up to date anyway so didn't always work.
 
neil_g said:
As I said I don't think its some big conspiracy, just that a lot of epos are limited functionality.

We were fortunate that our guys coded in house and jumped at the chance to charge a lot of money for the custom work.

Half the time the provided flight data wasn't up to date anyway so didn't always work.
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The point, neil, is transparency.

It is not legally binding to have to show your boarding card, and many cashiers have refused to sell an item unless you show your boarding card. Now that it is revealed that the stores make VAT savings off of you without passing on any savings you should be entitled to, it of course brings them under scrutiny. It is simply not right, and they were clearly banking on people not knowing or finding out.

Another article here: http://www.independent.co.uk/news/u...assenger-rebellion-gathers-pace-10450819.html

Treasury ministers have demanded an end to rip-off VAT charges by some airport stores as the grassroots passenger rebellion against the racket gathers pace.

The Financial Secretary to the Treasury, David Gauke, told The Independent he was concerned and disappointed that some of Britain’s top retailers were pocketing millions of pounds in VAT discounts without passing the savings to customers.

The practice, where stores demand that passengers present their boarding cards at checkouts before paying for any goods, was first revealed by this newspaper last week.

The information is used by stores to avoid paying 20 per cent VAT on everything they sell to customers who are travelling outside the European Union. Most of these stores, including Boots and W H Smith, do not pass on the savings to passengers.

The Independent can also reveal the ruse is used by so-called “duty-free” shops to boost their profits on alcohol sales.

If a customer is travelling beyond the EU, retailers do not pass VAT on to the Treasury If a customer is travelling beyond the EU, retailers do not pass VAT on to the Treasury.

Mr Gauke said the intention behind VAT relief at airports was to help passengers and not to line the pockets of retailers – and called for the practice to stop. “The VAT relief at airports is intended to reduce prices for travellers not as a windfall gain for shops,” he said.
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It is definitely dodgy retail practise.
 
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Tefal said:
id have thought it was illegal to be charging vat ona product that doesnt haver vat on it?
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You would think some form of deception is involved wouldn't you.
Charging the customer for something that you later claim back, as 'not; charged to the customer.

I understand the problem is smaller than suggested, as it only applies to flights going outside of the EU, and for many bigger items bought in this fashion, they are vat free or vat is claimed back by the customer, but the rest of it would appear to add up considerably over time.
 
Tefal said:
id have thought it was illegal to be charging vat ona product that doesnt haver vat on it?
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No, some goods are rated zero, like books.

And the departure lounge is considered "international waters" I would've thought, hence it ought to be VAT free. I always expected it to be 20% cheaper but it never is, it may be 5% less but not the savings you expect.

Reading that article leaves a bad taste in your mouth too.
 
[TW]Fox;28429620 said:
They are not charging VAT, they are charging more for the base product.

Which isn't great, but that's how it's done.
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so all price tags say "ex vat" ?
 
I don't actually object to higher price, like buying bottled water on top of Mount Fuji costs more than at the base camp. You are past immigration and if you want food, it costs more, they got you by the balls, that's fine.

But if you are not legally obliged to show your boarding pass...then I won't. As the result of showing them the boarding pass means they could basically increase their profit margin by 20%.
 
neil_g said:
As I said I don't think its some big conspiracy, just that a lot of epos are limited functionality.

We were fortunate that our guys coded in house and jumped at the chance to charge a lot of money for the custom work.

Half the time the provided flight data wasn't up to date anyway so didn't always work.
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The reason for scanning the boarding passes is so they know what not pay VAT for. If they can work out which flights are non EU and not pay VAT for those purchases and pocket the cash themselves, then they know who should not be paying VAT in the first place should they not?
 
[TW]Fox;28429642 said:
They don't say 'Inc VAT' either so not sure of your point.
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The prices at airports are often the same as high street prices, and with regards to electronics you can certainly buy things miles cheaper online in the UK.

In my experience the airports simply take the max rrp (which retailers usually discount anyway in order to stay competitive) and then say they take the VAT off there, and while the VAT is taken off of the "rrp", the savings are just about zilch, and still more expensive than online.

While of course no-one forces you to buy anything at an airport, it's still awful value, and these latest new reports further leave a bad taste in the mouth.
 
Richdog said:
The point, neil, is transparency.

It is not legally binding to have to show your boarding card, and many cashiers have refused to sell an item unless you show your boarding card. Now that it is revealed that the stores make VAT savings off of you without passing on any savings you should be entitled to, it of course brings them under scrutiny. It is simply not right, and they were clearly banking on people not knowing or finding out.

Another article here: http://www.independent.co.uk/news/u...assenger-rebellion-gathers-pace-10450819.html



It is definitely dodgy retail practise.
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Bear said:
The reason for scanning the boarding passes is so they know what not pay VAT for. If they can work out which flights are non EU and not pay VAT for those purchases and pocket the cash themselves, then they know who should not be paying VAT in the first place should they not?
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it may not be legally binding but in my example you got the flight number to refer it to the destination. if i remember rightly this was for HMRC so you could determine whether or not tax was chargeable (e.g. an internal flight or not etc).

like i say i doubt its a huge conspiracy. more technical limitations/naivety in my opinion.
 
I always assumed it was to check if you as a passenger would be vat except. Very cheeky but can't blame them though, guess we will see a small price increase soon to make up for it
 
Are these correct examples:

A traveller flying to a destination outside the EU purchases £12 worth of suntan lotion and shows his boarding pass. The seller does NOT pass on the £2 in VAT to the UK treasury? If he refused to show his boarding pass £2 would have to be sent to the treasury?

Another traveller travelling within the EU also buys £12 worth of suntan lotion, shows his boarding pass and £2 would then be "sent" to the treasury?
 
neil_g said:
it may not be legally binding but in my example you got the flight number to refer it to the destination. if i remember rightly this was for HMRC so you could determine whether or not tax was chargeable (e.g. an internal flight or not etc).

like i say i doubt its a huge conspiracy. more technical limitations/naivety in my opinion.
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Sorry, but if you think retail giants such as this are "naieve", then I'm not sure what to say...
 
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