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Government launches airport retail VAT relief review

The government has launched a review into airport retail to make sure VAT-free savings are passed onto customers.

Some retailers are keeping up to 50p of every £1 of potential VAT savings instead of passing those savings onto shoppers, it said.

Retailers including Boots, WH Smiths and Dixons have been criticised for not passing on savings but no fashion retailers have been named as yet.

The review is expected to be completed at the start of next year and will also cover all other airside shopping taxes, which may impact fashion retailers.

Chancellor of the Exchequer George Osborne said: “VAT relief at airports is intended to cut prices for travellers – not be a windfall gain for shops.

“But many people could be paying over the odds for their purchases because the government’s VAT concession isn’t passed on. This is simply unacceptable.”

The review will consider ways to ensure prices reflect VAT savings as well as savings on duty.

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