View Full Version : Squeezy and VAT on onboard sales (non EU)
Flying back from Bristol to Switzerland over the weekend I had was looking through their 'bistro' mag in the seat pocket. As it was Squeezy-UK (not Squeezy-Helvatique) all the prices were in £s and Euros. Didn't think much of it until the crew were nearing my seat I heard them say "Duty-freeze, Does anyone want any duty-freeze ..."
Now I'm fairly certain this particular aircraft does not only fly to non-EU destinations (in fact I would guess that it stays in the EU more than it exits it) it would seem to me the that stated prices would be inclusive of VAT (at UK rate of 20%).
If that is the case they would either be charging VAT (on a flight to Switzerland) when they shouldn't either passing it along or pocketing it.
Or are these sales somehow exempt from VAT?
I didn't buy anything, I rarely find their prices 'interesting', but they did make a number of sales on my flight.
Anansis
26th Apr 2011, 17:47
On a delayed ryanair flight I was once told by the crew that they could not sell me a cup of tea until after takeoff because of tax considerations. Therefore I assume that the goods are VAT exempt for intra EU flights. Not sure how or why though...
I think this is only for goods (intended) for immediate consumption on board (food and drinks) but not for the 'duty-freeze' trolly. I think that ended in 1998/9.
Cazza_fly
26th Apr 2011, 21:06
As Switzerland is outside of the EU then easyJet will offer sale of duty free items alongside its normal ''tax-free'' shopping range. These duty free items consist of the sale of cigarettes, tobacco as well as spirits all at duty free prices...
Hipennine
27th Apr 2011, 08:34
Remember that Duty Freeze are far from Profit Freeze. You would be amazed at the price of real duty-free shipboard stock to crew on a merchant ship, compared to airport/airline Duty Freeze to punters.
radeng
27th Apr 2011, 10:05
A litre of Lagavulin is cheaper in Tesco than at Heathrow duty free, and is half the price of it at Geneva duty free.
Well,
It appears to me that Squeezy is charging prices inclusive of 20% VAT when they have no right to (on flights out of the EU). Perhaps we should start asking for the tax-rebate form (if we were stupid enough to pay their inflated prices).
Is there a suitable authority in the UK who has authority of these issues (like the ACCC in Oz)?
Globaliser
28th Apr 2011, 12:39
It appears to me that Squeezy is charging prices inclusive of 20% VAT when they have no right to (on flights out of the EU).The airline's entitled to say it's £10 for a widget, wherever you're flying to. It must pay £1.67 to HMRC if you're on an intra-EU flight, but it keeps all of your £10 if you're flying to somewhere outside the EU. There's no rule that says they can't do that.
That's the way that the shops work at the airport, too.
It would be wrong if they told you that the price is "£8.33+VAT" for the widget, but then take £10 off you on a non-EU flight and not pay the difference to HMRC. But I'd be astonished if that's what they tell you.
Hipennine
28th Apr 2011, 13:10
If it really bothers you that much, just make a purchase and ask for a VAT receipt (if it's on Easy UK), which if they are charging vat, they are legally required to provide. However, as I believe that in the air, they are outside of the VAT rules, as said above, they can charge any figure they want.
Additionally, whatever the rules may say, businesses do make agreements with HMRC based on pragmatic approaches to simplify administration, especially where a company has to potentially account for several VAT regimes and contradictory rules as part of their normal operations. My experience of HMRC is that they are genuinely practical and seek solutions that are fair to the Govt, the taxpayer and the business, which minimise bureaucracy
k3lvc
28th Apr 2011, 15:57
The airline's entitled to say it's £10 for a widget, wherever you're flying to. It must pay £1.67 to HMRC if you're on an intra-EU flight, but it keeps all of your £10 if you're flying to somewhere outside the EU. There's no rule that says they can't do that.
That's the way that the shops work at the airport, too.
It would be wrong if they told you that the price is "£8.33+VAT" for the widget, but then take £10 off you on a non-EU flight and not pay the difference to HMRC. But I'd be astonished if that's what they tell you.
Exactly what happens - in many airports a nominal 'average' margin is fixed with suppliers whereas the actuals by destination are declared to HMRC. If retailer sells more to non-EU they pocket the difference as additional margin.
On many items now where commodity ingredients are involved and there is a price-war on the domestic market then you're not going to buy cheaper at the airport/on-board - airports want their xx% margin and the retailers need their yy% to cover the guarantees they've made to airport authority for a 5-10yr concession