Flying in the face of fairness: Airports must give VAT back to passengers, not HMRC

John Lewis deducts VAT from its airport prices, whether or not the customer is staying in the EU (Heathrow Photo Library)

All summer long, airports across Britain have been breaking records. Today, Manchester airport is expecting to handle more passengers than on any previous day – close to 100,000. Many of those travellers will be flying beyond Europe, and therefore could be paying more than they should for “airside” purchases.

As The Independent has revealed, stores such as Boots and WH Smith are charging passengers the same price whether or not they are liable for VAT, and hanging on to the tax element from those flying beyond the EU.

That contradicts the long-standing principle that tax exemption is a benefit for the global traveller, not the local retailer. On a £6 bottle of sunscreen, VAT accounts for £1 – which should be handed straight back to customers who qualify.

The first stage of our campaign has proved remarkably successful, with passengers in their thousands refusing to have their boarding passes scanned unless it brings them a benefit (as it does for “classic” duty-free purchases, such as alcohol and tobacco). So in the absence of proof to the contrary, retailers must assume travellers are liable to VAT – and pass it on to the Chancellor, who is currently enjoying an unexpected windfall. Let us hope it is short-lived. Our purpose in launching the campaign is to restore fairness, not to transfer wealth from commercial firms to the Government.

Meanwhile, the silence from the airports speaks volumes. Britain’s flourishing airport industry depends heavily on the revenue it creams off of passenger spending.

The airports should apply the enormous power they have over retailers to persuade them to hand back VAT immediately where it is due.

Our campaign provides airports and retailers with the opportunity to demonstrate fairness and tackle the perception that, once airside, passengers comprise the most captive of markets and, as a result, are up for exploitation.