Reply To: Duty Free Lunacy at LGW

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Common departure areas (CDAs) and their shopping facilities present a number of practical problems in their day-to-day operation.

One of these is that the application of VAT and certain excise duties depends on the destination of the passenger making the purchase.

If you are travelling outside the EU, then you will pay a different price on alcohol and tobacco products, and your boarding pass is used to verify your destination. It is not a marketing ‘check’.

If you are travelling within the EU, then part of the price the customer pays on goods (where applicable) will be UK VAT and this will be remitted to HMRC. If your destination is outside the EU then (with the exception of alcohol and tobacco) though the customer pays the same price as an EU passenger, then in many situations there is no VAT liability to the retailer. In this case, the boarding pass check allows the retailer to verify whether part of the price paid must be declared as VAT. It is not a marketing check.

More generally, there is a move across the UK to crack-down on the sale of alcohol and tobacco to underage customers. The sanctions for retailers found to be in breach are severe and include revocation of licence. This has led some retailers to issue a blanket edict that all customers must show proof of age to the cashier. It is simply too much of a business risk to allow an employee to jeapordise the retailer’s entire operation, simply because they are unsure/afraid to ask for ID.

This has led to some tabloid reports of OAPs being challenged, but the instances are few and far between. Many retailers now use a ‘Do You Look Under 25?’ protocol for ID request.

The fact is that, in the UK, a licenced retailer of alcohol is legally prevented from selling to underage customers; by default, the retailer is also legally able to request proof of age. They are free to specify what form that proof may take, though they have no mandate to note, store or cross-reference any part of that ID or the data contained therein. It’s a visual check, that’s all.

Back to the airport though, and there is clearly a possibility that boarding passes could be swapped between passengers to gain access to lower alcohol and tobacco prices. There is also the possibility that BPs could be swapped and a retailer’s VAT liability be increased. In the worst case scenario, BPs could be swapped to allow passengers to travel on different flights.

In the latter case, this is why there is usually a photo-check and also a passport reconciliation in CDA airports (the webcams at Heathrow, for example) and in the former case this is why a cashier would ask to see a passport when making most purchases.

With the Police and HMRC able to issue huge fines and potentially compromise business operation through revocations of permissions, it’s therefore, to me, really quite understandable why large businesses are seeking to minimise their exposure to risk.

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