[MarcusGB]

In all fairness to Schiphol that were doing this well over a year ago, when i asked “why? “, the very calm and courteous Dutch lady said it was for the Airport planning, to see where passengers go, what they use, so that they may plan for next year’s airport expansion.

At this time, they are finishing off the expansion and areas that are more well used. In this respect, i do not mind.

However, when this first started at LHR, i asked if i was getting a tax refund on the copy of “The Times” I was buying, and unless i was it would not be shown.

I have walked away from other outlets leaving the goods behind if they are rude or lie, reminding them what it is used for!

[MrMichael]

@ FDOS_uk. I don’t wish to be an apologist for the retail shops, but they are not avoiding tax, it is not due on sales to destinations outside the EU.

I disagree, the tax break on exporting to a non EU destination is for the exporter, not the seller. Thus it is my view that by in effect charging the tax to the buyer, and then not paying the amount charged to HMRC they are either dodging tax or stealing from the purchaser/exporter. HMRC have it wrong and it should be investigated by HMRC in conjunction with Trading Standards. At no point to my knowledge have retailers such as Dixons/Smiths/Boots ever exported anything.

[SimonS1]

I believe where goods are leaving the EU, airside airport retailers are allowed by law to ‘zero-rate’ the sale for VAT purposes. They are supposed to have evidence of this, hence asking for boarding passes.

In these cases the VAT is not charged to start with so I don’t understand how there could be any theft or avoidance.

If there is no evidence of goods leaving the EU then VAT is due, collected by the retailer and paid to HMRC.

[FDOS_UK]

SimonS1 – 23/08/2015 11:12 BST is correct.

Even if VAT has been paid, it is possible to reclaim it on exported goods (outside the EU), as the information in the link below makes clear:

http://www.heathrow.com/airport-guide/terminal-facilities-and-services/vat-refunds

So the airport retailers have not been ripping off HMRC, but selling at a single price and, depending on your point of view, either

– ripping off the travellers to countries outside the EU

or

– cross subsidising prices to EU destinations using the extra margin from the outside EU sales.

[BigDog.]

FDOS_UK – 23/08/2015 11:54 BST

Yes. Having a small VAT registered company am obliged to make quarterly returns to HMRC. This includes

2) VAT due in the period from other EC member states
4) VAT reclaimed .. on purchases.. including acquisitions from the EC

[stevescoots]

Bottom line is vote with your feet. They are maximising profit as any business would when competition is restricted or non existant. I never buy in UK airports from these shops or the DF unless somebody where I am travelling to has made a specific request. Its not just airside, look at the recent post about Heathrow connect. Also if you are a smoker like me and arrive at T3 with no lighter WH smith will charge you the tidy sum of 2.99 for a lighter they sell on the high street for 50p. captive market.

[stevescoots]

Bottom line is vote with your feet. They are maximising profit as any business would when competition is restricted or non existant. I never buy in UK airports from these shops or the DF unless somebody where I am travelling to has made a specific request. Its not just airside, look at the recent post about Heathrow connect. Also if you are a smoker like me and arrive at T3 with no lighter WH smith will charge you the tidy sum of 2.99 for a lighter they sell on the high street for 50p. captive market.

[Andrew66]

I agree Steve , and it’s the same if you decide to stop off at the petrol station to buy cigs or chocolate , the price is higher than other high street outlets . Captive market and its business model .

The ” duty free ” shops are legally complying , they are not evading VAT, but are avoiding it , it’s morally devious ? But is avoiding tax wrong ?
My earlier point is that the media kicked up a storm about this and blazed with Dont show your boarding card , fair enough to tell people to vote with their feet and not give their custom to those businesses , but there are consequences in that we will end up paying more service charge because of reduced income to the airport operators due to the retailers contributing less .
I think it’s no good causing a fury in which the anger is directed at the low paid assistants serving in these shops having to bear the brunt of angry people refusing to show boarding cards , they didnt decide the company policy , they didnt decide the HMRC rules that legally allow the companies to behave in this way .
The pressure should firmly be put on HMRC to investigate and clear up this matter and insist the retailers comply

[FDOS_UK]

Andrew66 – 24/08/2015 07:45 BST

“they are not evading VAT, but are avoiding it”

No, you are completely wrong. VAT that is zero rated (i.e. exports outside the EU) cannot be due or paid to HMRC, as £n x 0% = 0.

If the passenger does not provide a BP to show proof of intention to export, then VAT will be due and will be paid to HMRC, by the shop.

The system is ‘fail safe’ from a tax perspective and I wish that some posters would stop stating that tax is being avoided – it is not, as several posters have said on this thread.

I also agree with Steve.

[SimonS1]

Companies have always charges different prices in different circumstances.

I went to a football game on Saturday where the club concerned charges £2 more for tickets bought on a match day. Same seats, location etc. They know you are a captive audience, however I wasn’t forced to buy.

Same applies at the airports. Sharp practice, maybe, however as far as I’m aware there is nothing illegal here, no theft, avoidance, evasion etc etc. If you don’t like it, don’t buy.

Airport charges are regulated by the government so I think the suggestion that if people stop buying at the airport, charges will suddenly go up is a bit far fetched. I would imagine the number of ‘boycotters’ is relatively small, reminds me of all the people who were going to desert BA when they changed the Avios model. Life will go on.

[FDOS_UK]

It’s easy to forget where the single prices at airport shops came from.

If we go back to 1999, duty free sales within the EU were about to end…

http://news.bbc.co.uk/2/hi/uk_news/232896.stm

After they ended, some shops decided to offer a ‘single price’ for everyone, to try to defend their businesses – there are exceptions, e.g. the green or blue ticket booze prices – but one price for all was the way to take some of the sting away for EU travellers.

16 years on, it looks like profiteering – so I agree, if you don;t like the prices, don’t use the shops – the market will adjust if enough do not buy.

[SealinkBF]

Given that revelations about Cafe Nerro, Amazon and Starbucks appear to have had limited impact on shoppers habits, I think it’s the case the government should simply close loopholes.

The idea that people heading off on holiday should be entitled to cheaper booze or perfume is laughable anyway.

[FDOS_UK]

SealinkBF – 24/08/2015 10:04 BST

What loopholes do you think the government should close?

[MrMichael]

A few things to clear up here.

1. I accept that maybe the retailers “may” have not done anything illegal. However my understanding is that tax is due on items unless exported outside the EU. Surely therefore the tax break is due to the exporter not the seller???

2. FDOS_uk States the system is foolproof. I am not so sure. What is to stop an EU traveller from borrowing a non EU boarding pass to stock up on duty free goods from another traveller or, as in my case…. I flew to Heraklion last year via GVA, thus was able to purchase duty free with my GVA boarding pass. I never cleared immigration/customs in GVA but connected straight through to Greece. Was that legal?

3 I agree with the posts about boycotting will cause prices to rise. However I would rather a company made an honest profit than the questionable deceitful way they have done so in the past.

3. Regarding closing a loophole. difficult in the case of Starbucks etc….in the case of Airport retailers, scrap the non vat on exports…..or legislate to the effect of my point above, the physical exporter/owner of the goods can not pay tax, not the seller.

[SimonS1]

@Mr Michael. In simple terms:

1. Unfortunately your understanding isn’t correct. See section 8.1 of the relevant VAT notice below which summarises that the shops are entitled by law to zero-rate goods for VAT where appropriate evidence is provided (of which a BP is one source of evidence).

https://www.gov.uk/government/publications/vat-notice-703-export-of-goods-from-the-uk/vat-notice-703-export-of-goods-from-the-uk

2. Foolproof is a relative term. I’m sure somewhere along the way a risk assessment has been made and the HMRC consider the current model to be acceptable. There will always some people who feel it is smart to borrow a BP or use an incorrect one, however I’m sure the numbers are very small and probably not worth overhauling the system. In your case I suggest the shop should not have accepted a GVA to Heraklion boarding pass, but then I would think that happens very rarely and is probably inconsequential. In any case have you any proof that the till didn’t just log your BP as unreadable and classified it as a ‘VAT paid’ purchase?

3. Wouldn’t we all, however commercial companies are well known for taking advantage of legislation.

4. Will never happen. If everyone travelling outside EU had to queue up and reclaim VAT the queues would be long. Plus I believe that technically once you have passed airside you are deemed to have gone through customs control anyway so the point at which the “export” takes place has already happened.

If the government feel it is warranted they will legislate to change things, however more likely they will just ‘encourage’ retailers to do the right thing, just like they ‘encouraged’ fuel retailers to pass on lower prices at the pumps. Meantime life will go on….from what I can see this has already dropped out of most media newslines.

[Author]

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