The UK’s reputation abroad as an expensive tourist destination faces further damage by the airport shops VAT savings scandal.
UKinbound responded to the row over airport shops not passing on tax savings to non-EU passengers and avoiding paying 20% VAT on customers’ purchases.
The inbound tourism trade body’s chief executive, Deirdre Wells (pictured), said: “We are very concerned to hear that some retailers are not passing on the VAT refund which is due to visitors from outside the EU.
“The UK already suffers from a perception that it is an expensive destination - and this is not helping.
“Retailers need to recognise the important contribution which inbound visitors bring to the UK and make them feel welcome, not pocket the tax refund which is rightfully theirs."
The Labour Party also warned that the British tourism industry, which relies heavily on wealthy shoppers from Asia buying luxury goods, was being damaged by the conduct of retailers at airports.
Maureen Hinton, an expert in global duty-free trends at the KPMG/Ipsos Retail Think Tank, warned that airport shops would be compelled to introduce dual pricing, with discounts for long-haul tourists, to quell the public revolt.
“From the PR point of view, it’s not good news. Passengers becoming more aware of this will be demanding the VAT back if they are entitled to it,” she told The Times. “There will have to be proper pricing introduced.”
Financial secretary to the Treasury, David Gauke, urged retailers to pass on savings to customers.
“The VAT relief at airports is intended to reduce prices for travellers, not as a windfall gain for shops,” he said. “We urge all airside retailers to use this relief for the benefit of their customers.”
But retailers were last night reported to be defying the appeal to end the airport tax scam.
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