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Why does duty free shopping exist on the landside? Watch

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    I recently flew into London Stansted from Budapest and after clearing UK border control, I noticed that there was a small duty free shop just before the arrivals lounge.

    I went into the shop and bought a bottle of EDT. I asked the assistant and she claimed that all prices were exempt from VAT (20%).

    How can this be legal / work? The point of VAT exemption in duty free shopping as I understand it, is that the final consumer will not be consuming the product inside the UK and therefore should not be taxed on the consumption of that product. However, with this shop, I was within the UK (in terms of geography and official borders) and I would certainly be consuming this product within the UK. In my eyes, I should have paid VAT on my purchase, since I wasn't leaving the UK, rather reentering.

    Any clarification on this would be very helpful.
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    (Original post by londoncricket)
    I recently flew into London Stansted from Budapest and after clearing UK border control, I noticed that there was a small duty free shop just before the arrivals lounge.

    I went into the shop and bought a bottle of EDT. I asked the assistant and she claimed that all prices were exempt from VAT (20%).

    How can this be legal / work? The point of VAT exemption in duty free shopping as I understand it, is that the final consumer will not be consuming the product inside the UK and therefore should not be taxed on the consumption of that product. However, with this shop, I was within the UK (in terms of geography and official borders) and I would certainly be consuming this product within the UK. In my eyes, I should have paid VAT on my purchase, since I wasn't leaving the UK, rather reentering.

    Any clarification on this would be very helpful.
    Never heard of duty free being on landside. Although I've only ever flown from Heathrow.

    Whenever you buy goods from duty-free, you must show your boarding pass to the till assistant anyway.
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    (Original post by londoncricket)
    I recently flew into London Stansted from Budapest and after clearing UK border control, I noticed that there was a small duty free shop just before the arrivals lounge.

    I went into the shop and bought a bottle of EDT. I asked the assistant and she claimed that all prices were exempt from VAT (20%).

    How can this be legal / work? The point of VAT exemption in duty free shopping as I understand it, is that the final consumer will not be consuming the product inside the UK and therefore should not be taxed on the consumption of that product. However, with this shop, I was within the UK (in terms of geography and official borders) and I would certainly be consuming this product within the UK. In my eyes, I should have paid VAT on my purchase, since I wasn't leaving the UK, rather reentering.

    Any clarification on this would be very helpful.
    It's still airside if it's before you exit into the arrivals lounge.

    Also it's where you can collect pre-ordered duty free items that you bought airside before boarding your outbound flight (or ordered online).
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    (Original post by Doonesbury)
    It's still airside if it's before you exit into the arrivals lounge.

    Also it's where you can collect pre-ordered duty free items that you bought airside before boarding your outbound flight (or ordered online).
    Thank you for your reply!

    I don't understand how it can be airside before I exit into the arrivals lounge? Surely the authorities and the shop will know that I will be consuming the product in the UK?

    Regarding the pickup and online ordering, that makes perfect sense!
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    (Original post by londoncricket)
    I recently flew into London Stansted from Budapest and after clearing UK border control, I noticed that there was a small duty free shop just before the arrivals lounge.

    I went into the shop and bought a bottle of EDT. I asked the assistant and she claimed that all prices were exempt from VAT (20%).

    How can this be legal / work? The point of VAT exemption in duty free shopping as I understand it, is that the final consumer will not be consuming the product inside the UK and therefore should not be taxed on the consumption of that product. However, with this shop, I was within the UK (in terms of geography and official borders) and I would certainly be consuming this product within the UK. In my eyes, I should have paid VAT on my purchase, since I wasn't leaving the UK, rather reentering.

    Any clarification on this would be very helpful.
    First of all you didn't buy duty free.

    Travellers within the EU are not entitled to duty free shopping.

    Moreover even when arriving from outside the EU, EU rules do not permit duty free sales on arrival. I can remember when Reykavik Airport had the only true duty free on arrival shop in the world. Now there are several, but none in the EU.

    What you did was buy at a price discounted by the retailer to save the amount of the VAT (not excise duty). Moreover the sale wasn't really VAT free. Internally, the retailer will account to HMRC for VAT on the lower price you paid. Essentially the retailer pretends that the transaction is free of VAT and gives you a discount equal to that VAT. There is nothing special in that sale being airside. Stansted Village Store could offer you the same deal as the one in the Stansted Airport shop. In other words, its all a con!
 
 
 
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