George Osborne launches a review into airport shops that fail to pass on VAT savings

The review comes four months after The Independent exposed how some of the country’s leading retailers were unnecessarily requesting passenger’s boarding passes so that they could claim the VAT discounts themselv

Some airport retailers were unnecessarily requesting passenger’s boarding passes so that they could claim the VAT discounts themselves. File photo (Peter Macdiarmid/Getty Images)

Airport shops that fail to pass on VAT savings to customers are facing a crackdown after George Osborne launched a review of the “simply unacceptable” practice.

The review comes four months after The Independent exposed how some of the country’s leading retailers were unnecessarily requesting passenger’s boarding passes so that they could claim the VAT discounts themselves.

The Chancellor said the review would ensure that VAT relief at airports was passed on to customers, not pocketed by retailers. He said some shops were keeping an estimated 50p in every pound of potential VAT savings.

It was revealed in August that airport outlets of many retailers, including Boots and WH Smiths, were asking shoppers to show their boarding card, with the information then used by the company to claim back VAT relief on sales to travellers leaving the European Union.

Ministers called for an end to the practice and now Mr Osborne has asked Her Majesty’s Revenue and Customs (HMRC) to launch and “extensive” review of airport sales.

“For families flying out of the UK for a winter-getaway, airports should be the ideal place to pick-up a bargain,” he said. “VAT relief at airports is intended to cut prices for those travellers - not be a windfall gain for shops.

“But many people could be paying over the odds for their purchases because the Government’s VAT concession isn’t passed on.

“This is simply unacceptable. I have launched a review to make sure that this VAT relief benefits those it’s intended for – consumers – whatever time of the year they are travelling.”

Revelations about the use of boarding cards to claim VAT relief led to a shoppers’ revolt in UK airports this summer, with many refusing to show their boarding cards, after HMRC confirmed to The Independent that it was not a legal requirement for them to do so.

Boots later said it would stop asking customers at airports to show their boarding passes when making purchases.

The review is expected to be completed by early 2016 and will also cover all other airside shopping taxes.