Airport retailers requested to pass on tax savings to customers

Currently VAT (sales tax) is levied at the rate of 20% in the UK. At airports where there is a ‘duty free zone’ the majority but not all retailers pass on a 20% reduction in price to the consumer if they are travelling outside the European Union (EU) according to revelations in a major UK newspaper, the Daily Mail. In order to be offered products at a reduced rate purchasers are required to show their boarding passes as a way of indicating they are about to leave the EU and therefore can be exempt from paying VAT. However it has been revealed that a number of major retailers, including Boots and WH Smith, have been requesting customers show their boarding passes but have not been selling goods at a reduced price, instead using the information to avoid paying the UK government VAT on the sale price in order to boost profits. Similar to other retailers these two are asking to see boarding passes which customers erroneously believe is to obtain a discounted price, however these retailers have indicated they are asking to see boarding passes for security reasons instead.
As a consequence the British government has intervened and requested that all retailers pass on the 20% reduction in prices where VAT will not be applicable. However a number of retailers have indicated they will not be prepared to do this. A WH Smith spokesman said that operating a system of dual pricing would be a “practical impossibility”, continuing, “Any VAT relief associated with the identification of customers travelling outside of the EU is reported in accordance with UK legislation, and any relief obtained is reflected in our single price and extensive promotional offers provided to all of our customers.”
Angry customers have taken to social media to voice their discontent and a good number of passengers are now refusing to show their boarding cards to these identified retailers, which is well within their rights. Simon Gershenson, a Twitter user, sent the high street chain Boots a tweet saying “@BootsUK won’t be showing you my boarding pass again, rip off Boots.”