PQ magazine is for part qualified accountants.
Read the latest web issue here – if you like what you see sign up today
Check in at Boots for a VAT refund
Who should pocket airport VAT refunds? Graham Hambly asks the question
Airport shoppers received a new concession over VAT refunds recently when retail giant Boots agreed to return tax discounts at the checkout.
Airport shops have to charge VAT on purchases made by shoppers travelling inside the EU. However, those going further afield are meant to be exempt VAT.
Until last summer, airport retailers were simply pocketing the VAT paid by exempt passengers. WH Smith was the first retailer to return some of the tax to eligible travellers, and those flying beyond Europe received a discount if they spent over £6.
Now anyone flying outside the EU who spends over £5 in Boots’ airport shops will, on production of their boarding pass, be given back the VAT. That means on an £8.50 bottle of suncream the flyer can expect a £1.42 refund.
Boots UK’s Asif Aziz said: “Over the past year we have been carrying out a comprehensive review of VAT relief concession at these stores to find out the right solution to meet customers’ needs, while keeping our [airport] prices the same great value as in our high street stores.”
He explained: “We will introduce a new scheme in which customers travelling outside the EU will not pay VAT on VAT-able items which are priced at or above £5.”
In 2015, the then chancellor George Osborne announced a review of duty-free shops to ensure that the airport retailers were passing on VAT savings to customers. He was concerned about the ethics of retailers keeping up to 50p of every £1 of potential VAT savings for themselves, instead of passing them on to shoppers.
Dixons, meanwhile, has said that it will not offer VAT refunds as it felt customers at the airport benefited from savings through lower prices.
Subscribe to RSS