With duty-free savings on clothing, electronics and perfumes set to end on the 1st of January, experts have predicted that the move will lead to 138,000 job cuts and a loss to the economy of £3.5 billion.
The changes were made by The Treasury “following concerns that the tax-concession is not always passed on to consumers in airports” and in a bid to raise £1 billion in cash.
They said, “We are ending tax-free sales in airports of goods such as electronics and clothing for passengers travelling to non-EU countries, following concerns that the tax-concession is not always passed on to consumers in the airport. In some instances these tax-free goods are brought back into the country by UK residents, putting high street retailers at a disadvantage.”
Now, duty-free savings will only apply to alcohol and tobacco products.
Critics of the scheme though argue that the eradication of the discounts for customers on said luxury items will deter shoppers from spending money at UK airports and even from visiting the UK altogether.
At a time when the tourism industry is crippled due to the Coronavirus pandemic and subsequently closed borders, experts are understandably worried as 40 per cent of their income comes from airside retailers.
In a statement provided to the Daily Mail, Karen Dee, chief executive of the Airport Operators Association, said, “The Government have once again shown a complete lack of awareness for the jobs and businesses on the line in the aviation sector. Our industry is weathering the worst crisis in the history of civil aviation, it can scarcely afford another hammer blow like this.”
Karen Dee added, “Many foreign visitors will now choose to go elsewhere, attracted by the beneficial tax and excise regimes of our European competitors. This will harm not only UK airports but the high street stores that hugely benefit from tourists.”