UK Duty & Tax Free
UK industry battles to avoid “catastrophe” (continued)
On this page we assess the key talking points and feature industry reaction.
Key talking points about the new legislation
- What does this spell for the future of non-duty free categories in English, Scottish and Welsh airports. How will airports, retailers and brands react?
- If such items can no longer be sold tax free, what are the contractual repercussions for incumbent and future retail operations?
- Does this accelerate (as logically it should) the case for UK arrivals duty free shops?
- Overseas retailers selling to UK-bound travellers (including returning Brits, notoriously high purchasers of liquor & tobacco) can now benefit from a sharply boosted allowance. Get those multi-packs ready…
- What does all this mean for Northern Ireland? (See comment below.)
- What does it say about the British government’s appreciation (or complete lack) of the immense distress being experienced by UK airports and travel retailers?
- What harm will the VAT-registration changes do to UK domestic retailers selling to international travellers?
- What can be done about it (the UKTRF insist the battle to turn these plans around has just begun and can be won)?
- The Moodie Davitt Report is organising an urgent session at the forthcoming Virtual Travel Retail Expo in October to debate the subject and rally support behind the UKTRF.
What they said
UK Travel Retail Forum Chair Francois Bourienne: “The anger within the UK industry is palpable. This short-sighted proposal was announced without any discussion with industry, no impact assessment, and no warning. It places UK airports and retailers at a massive disadvantage and will simply send millions in retail revenue to airports in Europe and further afield.
“If all tax free sales are to be ended (other than liquor & tobacco), it will have a substantial and immediate impact on UK airports. Hundreds of millions will be lost in sales, & thousands of jobs are at risk – at a time when the industry is already on its knees. This could be the final nail in the coffin of several UK regional airports.”
ETRC President Nigel Keal: “The proposal from the United Kingdom to remove VAT relief from sales to international passengers leaving the UK poses a threat to us all. VAT free sales are a cornerstone of the duty and tax free industry. “If adopted, this proposal would dismantle the framework upon which our industry operates, and eventually threaten the viability of the entire aviation ecosystem.”
Airport Operators Association (AOA) Chief Executive Karen Dee: “The Government have once again shown a complete lack of awareness for the jobs and businesses on the line in the aviation sector. Our industry is weathering the worst crisis in the history of civil aviation, it can scarcely afford another hammer blow like this.
“By removing the airside statutory concession, the Government is needlessly harming the revenue of retailers and airports. Passengers will be disincentivised from making purchases as they travel through the UK.
“Many foreign visitors will now choose to go elsewhere, attracted by the beneficial tax and excise regimes of our European competitors.”
Belfast International Airport Managing Director Graham Keddie (speaking to local media about the special status of Northern Ireland): “By extending the duty free sales to EU countries from Great Britain only, it puts Northern Ireland’s airports at a complete disadvantage, and instead of achieving additional revenue for the UK Treasury, passengers will choose to fly out of neighbouring airports, and the sales and job roles will be lost to the Northern Ireland and UK economy.
“I strongly urge the government to reconsider, review its proposal and act in partnership with its once world-beating aviation industry to secure jobs, businesses and livelihoods across the country.”
UK Treasury (on the removal of tax free sales on some categories): “It follows concerns that the tax concession is not always passed on to consumers in the airport. In some instances these tax free goods are brought back into the country by UK residents, putting high street retailers at a disadvantage.”
The Moodie Davitt eZine Issue 283 | 16 September 2020
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