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Old 13.08.2015, 00:26
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British Airports VAT Scam

Cheating barstewards, I've actually been refused service a number of times because I didn't have my boarding card on me

Airport shops row: Boots and Dixons to issue new rules on boarding pass checks
Amid passenger revolt retailers are understood to be speaking to staff reminding them customers are not obliged to show boarding cards



Boots and Dixons are to issue new guidance to airport staff about checking customers’ boarding passes following a consumer revolt over “rip-off” VAT charges.

Customers of Boots and Dixons and other prominent stores including WH Smith pledged not to show their boarding passes at airports after it emerged that retailers were benefiting from VAT savings without lowering prices.

Attacking the practice as a “fraud” and a “con”, customers said they felt they were obliged to hand over their boarding cards at checkouts for security reasons or because they were getting a discount.

However, it has emerged that the information is used by stores to avoid paying 20% VAT on everything they sell to customers who are travelling outside the EU. Many stores, including Boots and WH Smith, do not pass this saving to consumers.

Amid growing revolt on Wednesday, Dixons said it had reminded its staff that customers are not obliged to hand over their boarding card at checkouts.

A Dixons spokeswoman said: “At Dixons Travel we do ask customers to show their boarding pass when making a purchase, but this is only on request and is not mandatory. We have re-issued existing guidance to all our colleagues confirming this as our clear process.”

A Boots spokeswoman said: “At Boots we always listen to our customers and to help remove any confusion at this time, we have taken the decision to no longer ask customers to show us their boarding passes while we undertake a longer term review of this situation. We are currently in the process of notifying our airport store colleagues of this change.”

The revolt comes after Treasury minister David Gauke said some retailers were not passing on savings to customers. Speaking to the Independent, he said: “The VAT relief at airports is intended to reduce prices for travellers, not as a windfall gain for shops.

“While many retailers do pass this saving on to customers, it is disappointing that some are choosing not to. We urge all airside retailers to use this relief for the benefit of their customers.”

The shadow culture secretary, Chris Bryant, was among those on Twitter saying he would refuse to show his boarding pass at airport stores.

At Heathrow on Wednesday, passenger Owen Evans blamed the government for not preventing retailers from taking advantage of the loophole. “It should be made illegal,” he said. “If the shops are playing the system, it’s the government’s fault for allowing them to do that. Anyone would do that if it’s legal. Obviously you want to do the best for your business. But obviously it’s not providing the best service for your customers.”

On Facebook, the retailers faced a storm of criticism from angry customers. Ian McNaughton demanded to be told when Boots would repay the government the VAT it had “essentially extorted” from customers flying outside the EU.

“Having purchased from Boots many times when flying abroad I’ve unwittingly been implicated in what in effect is fraudulent activity which I’m annoyed about now!” he said.

“Your behaviour and that of other airport retailers regarding this VAT issue is abhorrent and reflects major retailers contempt for their customers! I will not be buying anything from Boots again if I can until you change policy regarding this issue of VAT ‘fraud’ and make the necessary amends and would urge other customers to do likewise!!”

Another customer, Connie Tindale, asked Boots why “your staff at Gatwick are so aggressive when they ask for boarding passes”. A Boots representative replied that they were “concerned to hear about the Gatwick stores and will ensure this is fed back to them”.

At Heathrow, Jonathan Stanton, head of digital retail at Nintendo and a regular traveller, said he wanted the VAT he had paid in duty-free shops to be refunded. He said he felt cheated. “It’s unfair if they pocket the money,” he said. “It’s basically the VAT that we pay and they are pocketing it.

“It doesn’t make any difference to me today, but I have just come back from LA and I’m going to New York in a few weeks. I would probably like them to give me the VAT back at the point of purchase.”

Of the boarding card checks, he added: “I thought it was just a security requirement. It was never explained to me at the time.”

A spokeswoman for Boots said customers were asked – not forced – to show boarding cards at airports. She said: “It is not compulsory to ask for [boarding cards] so if someone doesn’t want to show it we won’t force it.”

In a statement the company said information on boarding passes was used to ensure accurate accounting. It said: “Our airport store teams are asked to request and scan boarding cards to ensure the accuracy of our accounting records, which includes the accurate reporting of VAT. We request our customers’ boarding cards so that our VAT accounting is in line with the HMRC’s requirements.

It added: “The HMRC and airports accept that this is general practice for all retailers located within airport terminals. Our pricing in airport stores is consistent with our London prices and VAT is not taken into account when setting prices of products. Showing a boarding card is not a compulsory requirement and any of our customers that do not wish to share this information can shop with us without the boarding card being scanned.”

A former WH Smith employee at Manchester airport, who did not wish to be named, told the Guardian that store staff were told to check boarding passes as part of an unexplained “survey”.

WH Smith confirmed that staff in its airport stores requested customers to show boarding passes, but conceded “there is no obligation on the part of the customer” to do so.

It added that dual pricing would be impossible to implement even though many duty-free shops already display two prices – one if you are flying in the EU and a lower price if you are flying outside the EU.

It said: “Whilst much of what we sell, eg newspapers, magazines and books, is fixed price and does not attract VAT, any VAT relief associated with the identification of customers travelling outside of the EU is reported in accordance with UK legislation, and any relief obtained is reflected in our single price and extensive promotional offers provided to all of our customers.

“Operational and financial system constraints make any form of ‘dual pricing’ for our extensive product file a practical impossibility. The destination data, regardless of whether it is to the UK, EU or beyond allows WHSmith to analyse the purchasing trends by time of day and by product category for customers travelling to different locations, and assists us in product ranging and placement decisions at our airport stores.

“This information is limited to the IATA three-digit destination airport codes, which form the basis of IATA’s worldwide airport database and does not give access to any personal data of WH Smith customers.”

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Old 13.08.2015, 02:30
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Re: British Airports VAT Scam

I flew today and refused to show my boarding card, boots refused to sell, I suspected they would so just dropped the basket on the floor from a nice height.

How HMRC can accept that the receipts don't show vat is taking the piss.
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Old 13.08.2015, 06:54
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Re: British Airports VAT Scam

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I flew today and refused to show my boarding card, boots refused to sell, I suspected they would so just dropped the basket on the floor from a nice height.

How HMRC can accept that the receipts don't show vat is taking the piss.
Retailer has to show goods exported out of EU, then VAT does not need accounting for. Same as shopping in DE & exporting to CH
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Old 13.08.2015, 09:06
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Re: British Airports VAT Scam

I can understand people getting upset by this, but is this any different from the thousands of companies in the UK that don't take off the VAT when you buy something from them online and they know it's being sent outside the country? As far as I know it's entirely up to individual businesses whether they take the VAT off a purchase or not.

Of course, if you're crazy enough to pay duty free inflated prices to start with ....
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Old 13.08.2015, 09:21
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Re: British Airports VAT Scam

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but is this any different from the thousands of companies in the UK that don't take off the VAT when you buy something from them online and they know it's being sent outside the country? As far as I know it's entirely up to individual businesses whether they take the VAT off a purchase or not..
amazon.co.uk take the relevant tax off, if they sell it and dispatch it themselves, - and if the delivery address is in Switzerland/Liechtenstein.

expresschemist.co.uk take the relevant tax off - if the delivery address is in Switzerland/Liechtenstein.

many others don't, unfortunately.
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Old 13.08.2015, 09:26
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Re: British Airports VAT Scam

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“Operational and financial system constraints make any form of ‘dual pricing’ for our extensive product file a practical impossibility. The destination data, regardless of whether it is to the UK, EU or beyond allows WHSmith to analyse the purchasing trends by time of day and by product category for customers travelling to different locations, and assists us in product ranging and placement decisions at our airport stores.
This is complete BS and they know it. It would be very simple for their PoS equipment to simply deduct the VAT from the total bill on completion. No need for dual price lists or any sh1 like that. They certainly - as was acknowledged yesterday - deduct it from what they pay over to HMRC.

The second part is equally insulting. "We want your personal data to help us sell more" is what it actually says.
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Old 13.08.2015, 09:37
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Re: British Airports VAT Scam

This has been pretty obvious for years now. When you pick up stuff cheaper at a supermarket than the duty free then all but the thickest of us would have realised that the duty free part is not being passed on to the customer.

That said it doesn't make a blind bit of difference for me as the only things I'll buy once through security, in that captive market place and mini cartel, is a bottle of water and/or a dodgy sandwich. If they want to see my boarding pass then fine by me. Flying is already too much of a pain in the arse for me to want a stand up row with a cashier when all I want is something to eat or drink.
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Old 13.08.2015, 09:55
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Re: British Airports VAT Scam

What's particularly annoying is all the crap the shops are spouting about "impossible to implement dual pricing" etc.

They're perfectly capable of implementing differential tax claims when it profits them! A simple X% off certain items special is pretty standard in most shops, so just do it for VAT.

If one of them would break ranks and do something reasonable, maybe even giving 15% back and keeping 5% for admin costs, I'm sure they'd get a big surge in customers.
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Old 13.08.2015, 09:58
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Re: British Airports VAT Scam

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amazon.co.uk take the relevant tax off, if they sell it and dispatch it themselves, - and if the delivery address is in Switzerland/Liechtenstein.

expresschemist.co.uk take the relevant tax off - if the delivery address is in Switzerland/Liechtenstein.

many others don't, unfortunately.
Yes, indeed they do plumtree. But unfortunately, they tend to be the exception rather than the rule. QVC and Ideal World also take the VAT off iirc.

If the businesses at airports are scanning the boarding passes then they know exactly where their customers are travelling and could easily knock the VAT off the ticket. Or their staff can do it manually if necessary. I'm sure most, if not all of them, are familiar enough with the airport codes on the boarding passes to know which is exempt from VAT nd which is not.
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Old 13.08.2015, 10:05
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Re: British Airports VAT Scam

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This is complete BS and they know it. It would be very simple for their PoS equipment to simply deduct the VAT from the total bill on completion. No need for dual price lists or any sh1 like that. They certainly - as was acknowledged yesterday - deduct it from what they pay over to HMRC.
Exactly - it's not impossible, just a matter of programming and procedures. Whoever wrote it should be ashamed of themselves as it is, to all intents and purpose, a lie.
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Old 13.08.2015, 10:06
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Re: British Airports VAT Scam

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I flew today and refused to show my boarding card, boots refused to sell, I suspected they would so just dropped the basket on the floor from a nice height.

How HMRC can accept that the receipts don't show vat is taking the piss.
Aren't you a pilot Rob?
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Old 13.08.2015, 10:15
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Re: British Airports VAT Scam

I hope WH Smith change their self service machines, you can't pay for goods without swiping the barcode on your boarding pass.
Actually, I hope they bin the machines altogether.
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Old 13.08.2015, 10:17
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Re: British Airports VAT Scam

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This has been pretty obvious for years now. When you pick up stuff cheaper at a supermarket than the duty free then all but the thickest of us would have realised that the duty free part is not being passed on to the customer.


Fully agree. I never thought of it as a scam, just that prices are more expensive at the airport, hence I am wary about airport shopping. Just like prices for the same thing can be different from one store to the other. Eg. "duty free" goods in the Zurich airport are sometimes way more expensive than in London City airport. I bought a perfume for about GBP70 in London City airport, after seeing it in Zurich Airport for Fr.140 and almost having a fit with my wife for daring to ask me to get it for her. Is this a scam?


Pity some stores who are innocent also get caught up in this. Today's Telegraph reports that some shops refuse to serve customers who do not want to show their boarding pass, but then goes on to say that these shops already take off VAT from their pricing. Certainly true in my experience a few weeks ago - was looking at my dream Omega watch at the Queesn terminal for around GBP3500. Zurich airport price was Fr.6400.


But I would never buy anything from Dixons (we have digitec) nor Boots at the airport.... they are not cheaper.
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Old 13.08.2015, 10:39
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Re: British Airports VAT Scam

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I hope WH Smith change their self service machines, you can't pay for goods without swiping the barcode on your boarding pass.
Actually, I hope they bin the machines altogether.
Couldn't agree more, they are a pain in the butt and cause the biggest queues in my opinion. They need more staff to sort out all the problems they have with them ( including all the numpties who are incapable of using them) than they would if they had regular checkouts.
I can't be bothered with all that faffing about just to buy a magazine to read on the plane.
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Old 13.08.2015, 10:59
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Re: British Airports VAT Scam

I was always of the understanding reclaiming VAT was dependant on where you lived and not where you were going.

To get a VAT refund you just needed to prove you lived outside EU and with a boarding pass this requirement is not fulfilled, so i am begining to think that the shops that deducted VAT based on boarding pass alone were cheating HMRC.

HMRC don't take kindly to being diddled, i think this cheap VAT scam by airport retailers may come and bite them in the ass quite soon......
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Old 14.08.2015, 09:53
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Re: British Airports VAT Scam

Marks & Spencer (U.K.) deliver to Switzerland (clothing) but do not take the VAT off, however they state on their website that although the U.K. VAT is not included on deliveries to Switzerland they do maintain one price for all on the website.
In other words it appears they openly admit to charging more for deliveries to Switzerland and simply do not pass on the potential tax saving to customers.

Last edited by plumtree; 14.08.2015 at 10:05. Reason: minor edit
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Old 14.08.2015, 10:01
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Re: British Airports VAT Scam

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I was always of the understanding reclaiming VAT was dependant on where you lived and not where you were going.

To get a VAT refund you just needed to prove you lived outside EU and with a boarding pass this requirement is not fulfilled, so i am begining to think that the shops that deducted VAT based on boarding pass alone were cheating HMRC.

HMRC don't take kindly to being diddled, i think this cheap VAT scam by airport retailers may come and bite them in the ass quite soon......
On the first. IIRC the point is one of permanent export from the EU. Someone living in the UK and buying electronics or clothes at an airport is likely to be bringing them back - hence no permanent export. Could be an interesting arguement with booze, though.


On the second I would be very confident the system is long agreed with HMRC.
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Old 14.08.2015, 11:01
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Re: British Airports VAT Scam

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I hope WH Smith change their self service machines, you can't pay for goods without swiping the barcode on your boarding pass.
Actually, I hope they bin the machines altogether.
I've only used them once before, but I will again, even if they are a pain in the butt. As this is what happened to me at Manchester airport 2 months ago... (just copied from my FB)

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At Manchester airport last night I had £3.30 in coins left from my trip so thought I'd just spend them. I saw at WH Smiths they had a deal on, 2 choccy bars for £1.09 so I grabbed 6 and went to the till. They were all self service tills with buttons, slots, screens, scales, flashing lights and I had no idea where to start.



So I grabbed a member of staff who spent 2 minutes showing me what to do (and these self service tills are to save staff costs!). I scanned my choccies and put them on the scales and the total came up as £3.90, not £3.27.
So I grabbed another member of staff and explained the total was wrong, this one showed me how to scan my boarding card and press the total button when the discounts would be applied. Sure enough it worked, new total £3.27.


I then found the coin slot and fed in my £3.30 in coins. The screen then told me that I was due 13 pence in change. No! I only want 3 pence!
But then my change came out. Five new and shiny £1 coins. Maybe the company that makes these machines also makes one armed bandits.


This time there was no staff around to help me so I just put them in my pocket and spent them at at the bar. Cheers WH Smiths!
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Old 14.08.2015, 15:10
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Re: British Airports VAT Scam

In case anyone is wondering the VAT scam is alive and operational throughout Europe. Had it happen in Vienna yesterday, where a rather dumb shop assistant insisted I show a boarding pass, claiming it would be impossible to complete the sale otherwise, and was incapable of answering questions relating to VAT, security of the data scanned.
The same has happened to me in any case in Frankfurt and Munich (and possibly other places, though I don't remember).
What annoys me the most is their calling the shops "duty-free" which is a load of bs.
Conclusion - this isn't a UK problem, the scam exists all over the place. If the shops wanted to be honest, they would deduct the VAT from travellers with boarding passes travelling outside the EU (like returning to Switzerland) rather than just putting it into their pockets.
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