Airport VAT scam: We started this – now it’s time for George Osborne to finish it

Perhaps the Government can now turn its attention to the absurd fuel surcharges levied by airlines

Duty Free shops at Terminal 1 at Frankfurt / Main International Airport (Getty)

On a day of promise and resolve, it is heartening that the Chancellor has responded to The Independent’s call for fairer treatment of travellers by airport retailers. Our campaign centred on the practice of some stores charging the same VAT-inclusive price regardless of the passenger’s final destination.

Anyone seeking those duty-free classics of spirits and tobacco needs to show a boarding pass for an airport outside the European Union. But for most other goods, the only tax is VAT. On a £6 bottle of sunscreen, the store collects £1 in VAT. For passengers heading to EU airports the tax is passed on to the Treasury, but for other destinations some retailers have taken advantage of passengers’ understandable compliance in airports to pocket the tax element.

The UK Travel Retail Forum, which covers everyone from distillers and tobacco firms to the airports themselves, says it welcomes the opportunity to show “the value that we offer to consumers”. Certainly, airport shops comprise both an interesting distraction for some passengers and an important element in keeping handling charges - and therefore air fares - down. But some stores have been taking advantage of unfamiliarity with the airport environment to extract extra revenue.

Travellers are wearily accustomed to multiple identity and ticket checks as they negotiate the airport hurdles from baggage drop to the departure gate. So when a shop assistant demands their boarding pass when they buy a toothbrush or a plug adaptor, they are pre-disposed to cooperate. Passengers with the temerity to challenge staff have even been told it is a “security requirement” - an assertion that treats customers as fools, since the real reason is to establish whether VAT is payable.

George Osborne says it is “simply unacceptable” that the retailer keeps the cash. By the time families fly out for Easter holidays, High Street stores are likely to find that they can, after all, have systems in place to sell sunscreen for £6 to Spain-bound tourists but only a fiver for holidaymakers heading for Turkey.

Given the Chancellor’s welcome new interest in the aviation industry, perhaps the Government can now turn its attention to the absurd fuel surcharges levied by airlines. At a time when the price of oil is lower than it has been for almost a decade, nearly half of a cheap British Airways economy fare between London and New York comprises the fuel surcharge. Perhaps it is time for a new campaign.