I wrote earlier in the week about how some airport retailers were not passing on the sales tax (VAT) that they recover for purchases by passengers flying outside the EU, to the actual passengers. Today One Mile at a Time has an interesting take on the situation. You can read it here.
Whilst admitting that he doesn’t shop in retail outlets in UK airports, Lucky indicates that he is worried that the end of this might be higher prices.
That is a concern, but is it real? Unless airport retailers actually start charging more at the airport than in the High Street, and I cannot see that happening, there is so much competitive pressure on newsagents, electrical retailers and chemists in the UK that people will simply buy before they fly. The bad boys in all this are the retailers who, without any transparency, have been benignly asking for boarding passes without giving the reason. Passengers feel cheated. I suspect that even the best marketing person would have trouble getting a clerk in a store to say that the reason for the boarding pass is so that the store can recover the sales tax.
There is no doubt damage done to the reputation of the stores involved – WH Smith, Books and Dixons. The taxman says he’s not happy. In a situation where cuts to the public sector are huge I’d be happier for the tax man to get his cut on all sales.
In a new twist today, a Flyertalker posted that they had been told by a member of staff in a sandwich shop at Heathrow that her sandwich included VAT. Well that shouldn’t be. Cold take-away food is VAT exempt, unless the Revenue and Customs are treating the whole terminal as if it were part of the shop. I suspect a clerical error myself rather than a new fiddle.
Anyway, let’s see how this unfolds. It’s peak holiday season for travellers in the UK and silly season for the newspapers so this might just run and run!