After last week’s duty free revelation, a study undertaken by Kabbee, the award-winning licensed minicab price comparison and booking app, has today revealed that airport retailers fail to pass on an average of £2.5billion of VAT savings* to passengers travelling outside of the EU, each year.
Helping hundreds of thousands of air travel passengers get the best minicab fares to and from London’s airports all year round, Kabbee asked 1,000 of its frequent flyers what they thought of the tax pocketing behaviour of airport-based retailers.
Each year, approximately 116.5million people fly to countries outside the EU from London airports** and only 37 percent of Londoners knew why they had to show their boarding pass when buying from Duty Free, leaving 63 percent in the dark.
Joining hundreds of Brits who have already said they will refuse to show their boarding passes, including MP Chris Bryant and Dragon’s Den Duncan Bannatyne, well over half of those asked (59 percent) now refuse to conform.
The study has also revealed what consumers want to see happen – a massive 72 percent of respondents are calling for airport retailers to introduce a two-tiered price structure for EU and non-EU travellers. A surprisingly large 28 percent of consumers said they were less bothered about the tax arrangements.
Kabbee is encouraging consumers to urge retailers to ‘pass on’ the 20 percent saving, making travel that little bit more cost-effective, just as Kabbee does via its competitive airport journey fares. Each year, around 30 percent of all bookings via the app are to and from London’s airports.
The licensed minicab firm has launched a petition to help consumers call for change. See the petition here.
MP David Gauke, the Financial Secretary to the Treasury showed his concern for consumers at airports last week, saying he wants retailers to pass on the savings to shoppers. He said “The VAT relief at airports is intended to reduce prices for travellers, not as a windfall gain for shops.
“While many retailers do pass this saving on to customers, it is disappointing that some are choosing not to. We urge all airside retailers to use this relief for the benefit of their customers.”
Justin Peters, Kabbee Founder and CEO comments on the findings: “We know consumers are looking for more options to help make additional savings when taking a holiday, and the 20 percent discount they are losing out on, points us to one obvious way they can do this.
“We see hundreds of thousands of passengers booking journeys to and from the airport via Kabbee, so we offer competitive fixed fares that include parking spaces, in addition to a meet and greet programme, whereby the driver will personally assist the passenger and meet them at a designated location within the arrivals area. We hope our petition will help to make a real difference.”
-Notes to Ends-
- The study was conducted by Kabbee between 17/08/15 to 21/08/15 to 1,000 Kabbee users who have used the service to travel to / from a London airport in the last 12 months.
- *Annual number of passengers flying to countries outside the EU from London airports (116.5 million) multiplied by average VAT paid in an airport (£21.31) equals £2.5billion of VAT held back.
- The average VAT paid in an airport (£21.31) is calculated from the average spend per passenger in an airport (£127.84) by Londoners surveyed.
- **116.5 million people fly to countries outside the EU from London airports each year, calculated by multiplying annual number of passengers flying from London airports (143 million) by percentage of Londoners surveyed that said they had flown outside the EU (81.4%).
- The annual number of passengers who fly from London airports per year (143 million) is based on figures from each of the five airports (Heathrow, Gatwick, Stanstead, Luton and London City).