UK airports information

Boarding pass VAT scam

Ever wondered why you have to show your boarding pass at every shop in the departure lounge?

I have, and it winds me up. I can buy a meal in any of the restaurants without a problem, and yet, if I want to buy a bottle of water and a bar of chocolate, the self-service machine screams at me to show my boarding pass and I have to get someone to clear the machine before I can pay.

In fact, a few years ago, I had such a hassle purchasing a bottle of Calpol from Boots at Gatwick because I didn’t have my boarding pass on me when paying.

Most of us have been led to believe that it’s a requirement to show our boarding pass when purchasing anything. However, it’s not.

The real reason you have to show your boarding pass is because, if you’re flying outside of the EU, you don’t have to pay VAT on the goods you purchase… EXCEPT, most retailers aren’t telling you this.

According to research carried out by the Independent, instead of docking the VAT off your purchase price, they are pocketing the VAT. After all, they don’t have to pay it to the taxman because he doesn’t charge VAT on your purchase.

VAT is currently 20%, so for every item you purchase at £10, that’s £2 of “VAT” levied that isn’t going in your pocket, or to the Government, no, it’s going straight back to the retailer – if you’re flying to a destination outside the EU.

While a lost £2 on a £10 item isn’t going to break your holiday budget, it soon mounts up. If you purchase an iPhone, for example, at £600 – that’s £120 you should save (if you’re flying outside of the EU).

The retailer can’t pocket that money without evidence that you’re flying outside of the EU, hence the request to see your boarding pass.

Now think about this, you’re one person flying on holiday – outside the EU – and you buy yourself an iPad, a handbag, a couple of bottles of sunscreen and some sandals, or whatever, you could easily spend a £1,000 on those items, and pay VAT on the lot – at a £1,000, that’s £200 that you are entitled to save, which is going straight into the retailers’ coffers.

And, you’re not the only one! In July, 4.3 million people flew through Gatwick and 7.2 million people flew through Heathrow Airport. From the figures released by both airports we can see that 515,400 passengers at Gatwick flew on non-EU flights, at Heathrow 3,698,000 passengers flew on non-EU flights.

So, at these two airports alone, 4,213,400 passengers were on non-EU flights. As this number covers incoming and outgoing flights, let’s halve the number as a rough guess of the number of outgoing passengers who would be entitled to VAT-free shopping – that’s 2,106,700 passengers. If each one spent £10 in the airport shops that’s £21,067,000, that’s £4,213,400 in possible lost savings in July alone, if every shop didn’t pass on the savings.

It should be noted, that not every airport retailer is doing this, Harrods, for example, sells all its products VAT-free.

Showing your boarding pass is not a legal requirement – you may have been told it was for marketing purposes or necessary to complete the purchase, but you don’t have to show your pass.

The Independent is calling for an end to what they call the “sunscreen scam” and Martin Lewis from MoneySavingExpert.com is calling on travellers to refuse to let airport retailers scan their boarding passes.

I’m in, how about you?