Gov’t criticised over plans to end some tax-free sales at airports

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Gov't criticised over plans to end some tax-free sales at airports
Industry representatives criticised the move and said the aviation sector could not “afford another hammer blow” after the coronavirus pandemic.
// Treasury to extend duty-free shopping to British passengers travelling to the EU
// However, it will end tax-free sales in airports of electronics and clothing for passengers travelling to non-EU countries
// Follows concerns that tax-free goods were being brought back by UK residents, putting retailers at a disadvantage

The government has been criticised over plans to end tax-free sales on goods such as electronics and clothes at airports, after the UK leaves the EU.

The Treasury on Friday announced a package of changes which will come into force when the Brexit transition ends in January 2021, including extending duty-free shopping to British passengers travelling to the EU.

Passengers will be able to buy duty-free alcohol and tobacco products in British ports, airports, international train stations, and aboard ships, trains and planes, it added.

However, the Treasury also said it would be ending tax-free sales in airports of goods such as electronics and clothing for passengers travelling to non-EU countries.

It said this followed concerns the concession was not always passed on to consumers in the airport, and that in some instances the tax-free goods were being brought back into the country by UK residents, putting high street retailers at a disadvantage.

Industry representatives criticised the move and said the aviation sector could not “afford another hammer blow” after the coronavirus pandemic.

Airport Operators Association (AOA) chief executive Karen Dee said that by removing the concession, the UK Government was “needlessly harming” the revenue of retailers and airports.

“Our industry is weathering the worst crisis in the history of civil aviation, it can scarcely afford another hammer blow like this,” she said.

“Many foreign visitors will now choose to go elsewhere, attracted by the beneficial tax and excise regimes of our European competitors.

“This will harm not only UK airports, but the high street stores that hugely benefit from tourists.”

The UK Travel Retail Forum (UKTRF) said the decision may be the “best gift” the UK could have given the EU and would lead to “significant” job losses.

“This decision puts the UK out of step with travel retail systems around the world, completely disincentivises tourists to visit the UK and British passengers making purchases as they go on vacation abroad, and puts UK airports and travel retail at a substantial disadvantage against their European counterparts after Brexit,” UKTRF chairman Francois Bourienne said.

“In the more immediate term, this announcement deals a hammer blow to an industry already struggling with the devastating impact of the Covid outbreak.”

The Treasury said that the amount of duty-free passengers can bring back from non-EU countries will also be significantly increased, and extended to EU countries.

This means that passengers coming to Britain will be able to bring back three crates of beer, two cases of still wine and one case of sparkling wine without paying UK duties, it added.

The new duty-free inbound personal allowances for alcohol will be 42 litres of beer, 18 litres of still wine and four litres of spirits or nine litres of sparkling wine, fortified wine or any alcoholic drink under 22 per cent ABV.

On tobacco the duty-free inbound personal allowance will be 200 cigarettes or 100 cigarillos or 50 cigars or 250g of tobacco.

On other goods it will be £390 or £270 if travelling by private plane or boat, the Treasury said.

The new rules follow a consultation with industry on the approach to taxing goods carried across borders for personal use from January 2021, the Treasury added.

VAT refunds for overseas visitors in British shops will also be removed, it said.

While overseas visitors will still be able to buy items VAT-free in store and have them sent direct to their overseas addresses, the “costly” system of claiming VAT refunds on items they take home in their luggage will be ended, the Treasury said.

with PA Wires

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