Travel | December 11, 2020 11:50 am

Duty Free Shopping Is Ending at British Airports

The government is halting the VAT Retail Export Scheme, and the travel industry isn't happy about it.

Duty free shopping ends in British airports
A Duty Free shopping arcade in London's Heathrow Airport
Prisma by Dukas / Getty Images

Duty free shopping will mostly be ending in British airports starting in 2021.

As reported by the travel site Paddle Your Own Kanoo, the British government is halting most duty free shopping for international travelers. And out-of-country visitors who are leaving will no longer get tax refunds at airports if they’ve bought goods at British shops.

There are a few exceptions, including tobacco and alcohol, though those duty-free options will only be extended to passengers who are continuing on to EU countries. As well, passengers can get tax-free shopping on other goods if they have their shopping delivered direct to their home address.

Given that this new regulation is a potential multi-billion dollar loss for the country and puts potentially 20% of Heathrow’s income in jeopardy (not to mention a potential loss of 19,000 jobs within the British airport system), why do this?

A report in Airport Technology suggests that the decision to rescind the VAT Retail Export Scheme (VAT RES) was due to “concerns that savings weren’t passed to consumers, as well as inconsistencies with international law.” It’s also seen, oddly, as helpful to smaller airports that can’t offer the same tax-free shopping experience.

In a current-Covid, nearing post-Brexit landscape, the loss of duty free shopping (and most likely increased costs for airlines, who will pass on that cost uptick to passengers) could harm England in the coming years.

“With fewer non-EU passengers and a comparatively smaller commercial offer, retail is an important part of any airport’s proposition,” as one London City airport rep told Airport Technology. “Diminishing that at a time when airports are trying to survive this crisis and battling to attract passengers is an unnecessary blow and will give European competitors an avoidable advantage.”