We’ve all been there; you’re shopping in the duty free shops at the airport, and they ask to see your boarding pass.
If you’re anything like us, you probably happily showed them it immediately, assuming it was either for security reasons, or to prove that you’re entitled to duty free products.
But, as it turns out, we were all horribly mistaken.
The real reason these so-called “duty free shops” are asking to see our boarding passes is because they don’t have to pay VAT on sales to people leaving the EU.
The Independent explain: “Airport retailers demand boarding cards from customers to avoid paying 20 per cent VAT on everything they sell to passengers who are travelling outside the European Union, as there is no purchase tax due on such goods.”
Which is all well and good - until you learn that they are NOT passing the money saved over to their customers.
Instead, they’re charging the original higher prices and pocketing the savings for themselves.
Sarah Pennells, of money website SavvyWoman, fumed to The Independent: “If airport shops aren’t going to pass on the VAT saving, we should refuse to show our boarding cards.
“Shops aren’t being transparent. If they are not paying VAT on purchases made by passengers leaving the EU, they should be passing those savings on.”
As a result of this, many passengers have staged protests at airports over the airport VAT rip-off, in a bid to force companies to take note and eventually take action.
But what rights do passengers have?
Martin Lewis, of Money Saving Expert, has created a video to answer your questions on this, including whether you're legally required to show your boarding pass in airport shops.
Check it out:
Essentially, you can ask that shops do not scan your boarding card whilst making a purchase.
It is NOT a legal requirement for passengers to show boarding cards when buying goods, other than on duty free items such as alcohol and tobacco, as these carry an additional charge on top of the VAT.
Although if airside retailers don't provide proof that passengers have bought goods from the UK and are travelling outside the EU, they'll have to pay the standard VAT rate, according to HM Revenue and Customs (HMRC).
Do you think that shops should pass on VAT savings to their customers?
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