I don’t know about you but I get a bit irritated when I’m asked to show my boarding pass to buy something like a packet of tissues in Boots or a book in WH Smith. But I still do it. I always assumed it was a legal requirement and something to do with security…
Q. Why do shops ask for my boarding pass?
A. There are two likely explanations. The first is that they want to know whether you are travelling in the EU (European Union) or further afield. If it’s further afield, you don’t have to pay VAT on purchases (and they don’t have to pay the VAT to HM Revenue and Customs). But it’s also useful for them to know who shops in their stores and when – i.e whether certain flights are more lucrative than others.
Q. Could I refuse?
A. There’s no reason why you should hand over your boarding pass if you don’t want to. I know of people who’ve refused and they’ve still been able to shop. Airport shops could say it’s company policy, but would they really turn away someone’s custom because they won’t hand over their boarding card?
Q. I thought shopping was duty free at the airport?
A. Duty free shops in airports sell items, such as perfume, alcohol and cigarettes, without tax or duty applied. You can only access these shops once you’ve gone through security and only if you’re travelling to a non EU country.
If you’re travelling in the EU you can take as much as you like from one country to another without paying extra duty or tax on it, as long as you transport the items yourself and they are for your use (or to give away as a present) and you’ve paid any tax or duty that’s due in the country you bought them in. You can see how much duty you pay on alcohol and tobacco on the Gov.uk website.
SAVVY TIP: Although there are no specific limits on how much you bring from one EU country to another, the government’s Gov.uk website has a list of how much you can safely bring in without being asked questions.
Shops also sell items tax (VAT) free to people travelling within the EU or further afield. Reading one of the duty free retailers’ websites, it says that if someone flies outside of the EU, no VAT is charged (which is correct). It also says that if someone is flying within the EU, the VAT will be accounted for by the retailer and it says that, on average, prices for fragrances and non-vintage champagne will be 20% cheaper than high street prices.
It also says that you can save up to 50% off the price of spirits and the equivalent of VAT on skincare, sunglasses, watches and jewellery. But these prices are compared to the recommended retail price (RRP) and it’s certainly possible to get many items much cheaper than the RRP, especially if you buy online.
Q. What about food and newspapers?
A. Take away food may be subject to VAT but it depends on whether it’s hot or cold. Newspapers, books and magazines are zero rated for VAT if you buy them in paper form but not if you read them online.
Q. What are the shops doing?
A. What’s happening is that shops are not paying VAT on VAT rated items when someone shops at the airport if they are then flying to a non-EU country, which isn’t tax dodging – it’s definitely within the law. However, the shop isn’t passing that saving onto the customer. Instead, they’re charged the same as someone travelling in the EU who does have to pay VAT.
I can’t believe that it’s not possible for an airport shop to have a button on the till that deducts the VAT for someone who’s travelling outside the EU. Most stores can give discounts if items are sold without a box or sometimes just if you haggle – so surely technology could allow for a ‘non EU’ button on the till?
Update: On Wednesday the Treasury Minister, David Gauke, said that retailers should pass on the VAT saving to customers who are travelling outside the EU. I’m hoping they’ll make some changes soon.
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