A minister has waded in to the row that has broken out over shops refusing to pass on 20% price reductions to consumers in duty-free shopping areas.
Shops in the zones are entitled to claim back 20% on sales of goods to passengers departing the EU as VAT is no longer required to be paid.
To ensure they can do so, they have been demanding to see people’s boarding cards which are scanned with the information passed on to the government.
However, shops have then failed to pass on these price reductions to the consumer, meaning consumers are now refusing to show their boarding passes at the point of purchase.
A survey on the Telegraph’s website has revealed that 88% of consumers are now planning to withhold their passes.
Now chief secretary of the treasury David Gauke has said the relief was put in place to “reduce prices for passengers” instead of being a “windfall gain for shops”.
He added: “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.”
Steve Baker, a Conservative member of the Treasury select committee, added: “Consumers are entitled to expect that tax savings will be passed to them rather than become another addition to the bottom line for companies.
“I always thought that showing a boarding pass was an official requirement.”
The comments have been backed by Saga Holidays director of communications Paul Green who said: “Treasury ministers have confirmed what many holidaymakers believed for some time - that you need to be wary when shopping at Britain’s airports.
“The VAT exemption is supposed to benefit hard-pressed holidaymakers, but the only ones who appear to bagging a bargain are rapacious retailers - swiping a 20% VAT refund without passing it on to customers. Saying that it is just too difficult not to charge the VAT included price is nonsense - their systems are clever enough to reclaim the VAT so treating customers fairly should be simple.
“This is tantamount to racketeering and if rip-off merchants wont play fair by the travelling public then the Government need to act.
“They should make it illegal to charge VAT if it is not due or consider abolishing the VAT exemption and recycling the extra revenue to lower Air Passenger Duty.”