Heathrow’s bid to keep duty-free shopping: Britain’s biggest airport launches legal challenge to bring back bargains on perfume, clothing and electronics
- Heathrow argue it will intensify crisis facing battered aviation and retail industry
- As of January 1, tax savings on goods will apply only to alcohol and tobacco
- Abolition of VAT rebate scheme expected to cost £2billion in lost tax revenue
Britain’s biggest airport has launched a legal challenge against the decision to end duty-free bargains on perfume, clothing and electronics.
Heathrow argued the move will cost the country billions and will intensify the crisis facing the battered aviation and retail industries.
The Treasury has said that, as of January 1, tax savings on goods bought by outbound holidaymakers and business travellers will apply only to alcohol and tobacco.
Britain’s biggest airport has launched a legal challenge against the decision to end duty-free bargains on perfume, clothing and electronics (stock image used)
Ministers are also abolishing the VAT rebate scheme for tourists as part of the move.
The planned changes will leave the UK as the only country in the developed world to not offer tax-free shopping to travellers.
The bosses of WHSmith, Boots, Fortnum & Mason and Dixons are among business chiefs opposing the plans, warning it will trigger a £10billion reduction in spending in shops.
And the abolition of the VAT rebate scheme is expected to cost the Exchequer £2billion in lost tax revenue.
Heathrow has now launched a Judicial Review of the Chancellor’s decision – the first time it has embarked on a legal challenge against the Government.
In a letter to Rishi Sunak, the airport’s boss John Holland-Kaye warned: ‘Overnight, what draws many to our shores and has taken decades to build will be lost.’
The planned changes will leave the UK as the only country in the developed world to not offer tax-free shopping to travellers (stock image used)
The letter, co-signed by the bosses of World Duty Free and tax refund company Global Blue, claimed the plans will cause ‘untold damage to UK competitiveness’ after Brexit and will put up to 70,000 jobs at risk.
The Treasury said it recognises the ‘challenging times facing the aviation sector’.
A spokesman added it decided to end tax-free shopping ‘after concerns that the saving wasn’t always passed on to consumers, putting the high street at a disadvantage’.