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UK airport retails act on VAT row

UK airport retails act on VAT row

UK airport operators and retailers have agreed to provide great transparency on their VAT charges to passengers.

Last year it was alleged that many airport retailers were surreptitiously retaining the 20% VAT discount on sales of goods from their shops to passengers leaving the EU. According to EU VAT rules, this is not applicable.

To retain the VAT funds charged, and to comply with HMRC rules, the retailers involved had to take details of passengers' boarding passes. However, the retailers were misleadingly telling passengers that this was required for security reaons.

New guidelines issues by the UK’s Airport Operators Association and the UK Travel Retail Forum have created an industry Code of Practice. This require member retailers to clearly explain their VAT policy and not to insist on board passes if passengers refuse.  Where a retailer does offer the VAT refund on sales to passengers leaving the EU, then a record of the loading pass will be required.

Retailers in the scheme include World Duty Free, Boots and Harrods.

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VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.