Airport retailers fail to pass on duty free to consumers

Airport shopping used to be a pre-holiday pleasure, but UK retailers are facing calls to be more honest with airport customers as they collect millions of pounds in VAT discounts on duty-free items without passing on the savings.

Many stores in airports across the UK now demand that passengers present their boarding cards at checkouts before paying for any goods. But that is not a legal requirement, and instead the information is being used by stores to avoid paying 20 percent VAT on everything they sell to consumers travelling outside the European Union, The Independent reported.

Research by the publication found that the majority of the stores are passing little, if any, of the savings to customers, and instead are using the tax rebate to boost the profits of their airport franchises.

Paul Lewis from BBC Radio 4 consumer affairs programme Money Box Live said the problem is that retailers are not being straight with the public. “"They are asking to see passengers' boarding cards but not telling them that this is so they can make more money by not paying the VAT on what they're selling. They should be passing on the savings to the passengers who are travelling outside Europe."