To ask the Chancellor of the Exchequer, what assessment he has made of the potential effect on airports of the proposals he made in the Consultation on the potential approach to duty- and tax-free goods arising from the UK’s new relationship with the EU: A summary of responses, published by his Department in September 2020.
Ahead of the end of the transition period, the Government has announced the VAT and excise duty treatment of goods purchased by individuals for personal use and carried in their luggage to or from Great Britain. The following rules will apply from 1 January 2021:
- Passengers travelling from Great Britain to any destination outside the United Kingdom will be able to purchase duty-free excise goods once they have passed security controls at ports, airports, and international rail stations.
- Personal allowances will apply to passengers entering Great Britain from a destination outside of the United Kingdom, with alcohol allowances significantly increased.
- The concessionary treatment on tax-free sales of non-excise goods and the VAT Retail Export Scheme will not be extended to passengers travelling to the EU, and will be withdrawn for all passengers.
The concessionary treatment on tax-free sales currently affects airports that fly to non-EU destinations. The extension of duty-free sales to EU bound passengers will be a significant boost to all airports in England, Scotland and Wales, including Heathrow and smaller regional airports which have not been able to offer duty-free before.
The Government also recognises the challenges the aviation sector is facing as it recovers from the impacts of Covid-19 and has supported the sector throughout the pandemic, and continues to do so, including schemes to raise capital, flexibilities with tax bills, and financial support for employees.