To ask Her Majesty's Government what estimate they have made of the economic impact of the loss of duty-free sales on (1) Belfast International Airport, (2) Stansted Airport, (3) Manchester Airport, and (4) Newcastle Airport.
17 December 2020
Ahead of the end of the transition period, the Government has announced the excise duty treatment of goods purchased by individuals for personal use and carried in their luggage arriving from or going overseas (passengers). The following rules will apply from 1 January 2021:
- Passengers travelling from Great Britain to any destination outside the United Kingdom (UK) 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 UK, with alcohol allowances significantly increased.
The Government published a consultation which ran from 11 March to 20 May. During this time the Government held a number of virtual meetings with stakeholders to hear their views and received 73 responses to the consultation. The Government is also continuing to meet and discuss with stakeholders following the announcement of these policies.
The detailed rationale for these changes are included in the written ministerial statement and summary of responses to the recent consultation: https://questions-statements.parliament.uk/written-statements/detail/2020-09-11/hcws448 and https://www.gov.uk/government/consultations/a-consultation-on-duty-free-and-tax-free-goods-carried-by-passengers. A technical note has also been issued to stakeholders to expand on this document and to respond to issues raised by stakeholders.
On 25 November the independent Office for Budget Responsibility (OBR) set out their assessment of the fiscal impact of the withdrawal of the tax-free airside sales. The OBR estimate that the withdrawal will raise approximately £170 million per year for the Exchequer, after behavioural responses are taken into account and passenger numbers recover from the impacts of COVID-19.
The Government 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.