Airport VAT scam: Boots to review airport pricing policy after outrage from passengers

Campaigners and politicians have called on retailers to change their policies

Customers at Boots stores such as the one at Terminal 3 at Heathrow airport have been asked for their passes (Alamy)

Boots has caved in to pressure from campaigners and furious airport passengers and is now looking to overhaul its pricing structure at its airport stores, following revelations in The Independent that retailers are failing to pass on VAT savings to travellers leaving the EU.

The retailer, which has a string of stores in UK airports, said it was launching a widescale review of its airport policies.

Campaigners, politicians and officials have called on retailers, including Boots, WHSmith and Dixons Travel, to change their policies after The Independent revealed staff were asking for boarding passes so they could check where passengers were travelling – and pocket the 20 per cent VAT that is not levied on travellers leaving the EU.

Boots said in a statement: “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.”

It is understood that this could include everything from offering VAT refunds to passengers travelling outside the EU, removing the extra cost for all passengers – which several retailers at airports already do, as The Independent revealed – or keep the current system, which is likely to provoke further outrage.

This comes as East Midlands Airport made a bizarre claim that retailers in its terminal ask for boarding passes so stores can analyse what passengers are buying.

However, this excuse has been widely disproved over the past week, with individual retailers admitting that the only reason they ask for boarding passes is so transactions made by those travelling outside the EU can be presented as evidence to HMRC that no VAT needs to be paid.

A spokesman for East Midlands Airport insisted: “Retailers use the boarding card data to derive insights to help with their decision-making, such as the future placing of products for customers.”

However The Independent has seen letters sent from the airport in 2013, after a disgruntled passenger wrote to bosses asking why he had been refused the sale of a newspaper because he did not have his boarding pass to hand.

Then, John McGuinness, 65, from Kettering, was told it was due to “being able to monitor the trends of which passenger spends what”.

Retail operations co-ordinator at the time, Nick Maltby, added in the letter: “I’m sure you understand that by allowing one passenger to be an exception to the rule, this can mean that other customers in the queue behind… would also claim to be an exception.”

Mr McGuinness said: “It’s simply ridiculous that they would say something that is completely untrue. When everything came out this week about the real reasons for asking for boarding passes I felt vindicated.”

Boots has said it will stop asking customers for boarding passes while bosses conduct the review, which could last several months. This means the company will take no extra cash because it will have no evidence to pass to HMRC.

Dixons Travel and WHSmith said on Tuesday that they would reiterate guidance to staff that boarding passes should be requested but not required, but both said they would not be carrying out a review into their policies.

WHSmith has said it would be “impossible” to implement dual-pricing, even though pricing differs between its high-street and airport stores, and it has a till system run by BT Expedite, which uses dual-pricing with other retail customers, and works closely with franchise partner SSP, which also operates dual-pricing for dozens of other businesses.