ticket refunds - in particular the 'tax'

[knobbygb]

Anyone out there know the official policy on refunds of the 'tax and fees' part on unused tickets.. .. .My problem is that the airline are refusing to refund the tax on an unused ticket. The fare was an Apex so I don't expect a refund of any of the fare, but surely the tax is not the airlines' money to keep.. .. .In, the past, several times, from different airlines, I have had refunds of the tax portion of the fare - you simply send the ticket back and they put the £27 or so back on your credit card. But this airline is refusing. <img border="0" title="" alt="[Mad]" src="mad.gif" /> . .. .Any similar experiences?

[ST.CRISPIN]

The airline absolutely has to refund the tax.. there is no exception even if you have a tax only ticket(redemption/voucher etc) the airlines are only charged the tax if you fly..therefore you don't fly you don't pay the tax. think of countries where you have to pay tax on departure.. if you didn't get there then you wouldn't pay it.They're pulling your leg and wallet <img border="0" title="" alt="[Eek!]" src="eek.gif" /> by the sounds of things!!

[knobbygb]

I thought as much.. .. .Their original letter was a one-liner simply saying no refund was due. Having called them today, they say that they make a 'Refund Charge' which is applied to all refunds, and the charge (£40) is more than the tax due back (£27.60) so they aint' giving me anything.. .(I'm surprised they aren't asking me to sent the additional £12.40 I now 'owe them' for the refund!). .. .Still not happy! How can you charge someone for somthing that is rightfully theirs?. .. .By the way, this is one of the big UK carriers, not some fly-by-night operation, or a low-cost carrier. Interestingly, my wife once no-showed for an Easyjet flight and the tax re-appeared on my credit card 3 days later - no questions asked!. . . . <small>[ 13 March 2002, 18:27: Message edited by: Knobby ]</small>

[DFC]

Since the airline will be legally required to hand over this "tax" to the tax office then I would recomend that you make a claim for refund directly to the inland revenue using your tickets and the letter from this airline as proof that you did pay the money but did not travel.. .. .You should either get your money or a letter from the inland revenue stating that the airline is required to refund you the money.. .. .If it is the latter than small claims court should stand up for you with the backing of the tax man.. .. .Good Luck. .. .DFC

[chrishowley]

DFC - I think you are wrong. The airline is effectively refunding the tax to the passenger and then applying a refund charge. Presumably the ticket conditions state this (otherwise I reckon the practice would be illegal). They then take the view that they are not going to chase the excess of the charge over the tax because its not cost effecive to do so - its quite ok to right off debts which are uncollectable. . .. .I would expect it to be likely that customs and excise will not get involved as there is not relationship (contracual or otherwise) between the passenger and themselves.. .. .Anyway last thing I heard was that Knobby was flying to SW US on BA in First - so although this is horribly unfair I reckon he can afford the hit this once and won't allow it to happen to him again! <img border="0" title="" alt="[Wink]" src="wink.gif" />. . . . <small>[ 20 March 2002, 20:54: Message edited by: ExiledTyke ]</small>

[Boss Raptor]

Virgin Atlantic - didnt use a non refundable ticket LON-MIA last January 2001 - my travel agent applied to Virgin for the tax refund to which I am entitled a week later.... .. .To date 14 months later despite being chased very month by my travel agent the £45-50 tax has still not be refunded by VS to his Clearing House account...I am not alone he is chasing 7 other similar outstanding refunds.. .. .Am writing to VS this week demanding my tax back in 14 days or I will just issue a Small Claims Court action against them and disseminate the story to the press.... .. .Looks like VS are short of money doesnt it!. .. .DFC you are quite correct certainly under the UK fiscal enviroment collection/administration of a tax or duty is at the expense of the seller or producer and I am sure this 'admin charge' to make a tax refund will be dealt with before too long...after all when you return goods to a shop for refund as example the seller is not able to deduct a proportion of the VAT element as an 'admin charge'...however I suspect this airport/airline tax is being collected by Customs & Excise not Inland Revenue.... .. .I personally believe that this whole situation is highly questionable but have not had opportunity to investigate further at a fiscal level...something rings in my mind that this matter is already being addressed by the EU as part of a much larger ticket/tariffs problem ?. . . . <small>[ 22 March 2002, 08:53: Message edited by: Boss Raptor ]</small>

[under_exposed]

Boss Raptor, a shop can charge you as much as they want to make a refund, or refuse to give a refund if there is nothing wrong with the goods.

[Boss Raptor]

The example of the shop re: Sale Of Goods Act etc. is not the best I admit but in the case we are discussing we are referring to refund of the 'tax' which is quite correctly being collected for and on behalf of the fiscal authority...and therefore if not passed on is being held by the seller!. .. .After all I am certain the ticket tax is being administrated in the same way as VAT whereby a monthly return is made taking into account unused tickets in a contra arrangement against that current months balance due... . .. .Bottom line the airlines are holding our money and in my case for 14 months ongoing...the legality of the 'admin charge' will no doubt be challenged and decided upon in due course by the proper authorities...I am not an expect in fiscal procedures/tax law and have qualified my comments accordingly...

[chrishowley]

The fact is the practice is completely legal - but unfair. The only way it can be stopped is if the government decides to make these 'punitive' refund charges illegal - but so far that isn't the case and I doubt whether it ever will be. . .. .The only thing you can do is name and shame the airlines carrying out the practice and may be getting a consumner group on board. Fighting the airline is a waste of time as they are completely within the law.

[knobbygb]

Thanks everyone.. .. .Not sure about the Inland Revenue/Customs and Excise bit. The 'Tax' isn't all tax - most of it is an airport usage fee which is payable to the airport of departure (and arrival?) and some of it is the new 'security' charge - I assume the airport gets this too? . .. .The bit that actually IS tax, isn't VAT - I run my own business so would be reclaiming it if it was, I can assure you.. .. .I had thought of approaching someone like ABTA or IATA or some other representitive body, after all, although the ticket in this case was bought directly from the airline, they may still have been acting as travel agents (or am I wrong here) and so should be bound by some kind of 'guidelines'.. .. .Anyway, I've written back to them demanding the money one more time - I'd like to actually get details of the 'refund charge' in writing rather than just over the phone. I forgot to mention that they didn't return the original ticket when refusing my refund so I don't even have this as a proof of purchase (or proof of rip-off) so I've asked them to return this too.. .. .I'm now about to go online and read the conditions of carriage (bored - working nights). Like everyone else, I think, I just ticked the box that I had read this when buying the tickets - obviously, I'm not that bored!. .. .I'll keep you updated - if you can stay awake!. .. .PS – Tyke – It’s the principle, not the money, although, I’m sure as a Yorkshireman you’d agree that every penny is sacred! Did they have sheep in NYC?

[Boss Raptor]

I am using an analogy that the 'tax' is 'like' VAT - not that it 'is' VAT, there is obviously no VAT on airfares in the UK...and that any 'tax' is collected on behalf of the state at the expense of the collecting party...I am not certain as to the exact make up off the security charge but again I understood it to be a levy paid directly to government...can anyone assist by breaking these charges down?. .. .I have an Air Europa ticket LGW-MAD here, from last week and the charges listed are;. .. .£5 - the original government 'departure tax' I believe. .£8.40 - identified 'UB'on my invoice as Airport Service fee. .£3.20 - identified 'XT' ? this I think is the extra security levy. .. .Again if you dont travel the airline doesnt pay the Airport Service fee - although appears not a tax and the legalities of a refund maybe different...

[chrishowley]

Knobby - agree with you on the 'principle' principle - if enough people kicked up a fuss and kept them bogged down in paper work it would make it cheaper for them just to make the refund. . .. .No sheep in NYC - why do you think I'm returning. Let me know when you are free for a beer!

[Taildragger67]

Quick question - if you're owed money by an airline, doesn't that make you a creditor? So, by extension, if they don't cough up after a reasonable time, can't an action for bankruptcy be quietly filed? Or maybe even a wind-up order (it would be one hell of a wind-up!!)? Could this not jolt them into some sort of action?

[Gaza]

About 18 months ago BA introduced a series of outrageous charges - £25 for picking up tickets at the airport, £25 for making a change at an airport ticket desk and £40 for refunding tickets. Legally they are correct to refuse to refund you the tax as the refund charge (this applies to full fare and refundable tickets as well) exceeds the refund due. This is another example of BA's shocking attitude to customer service.

[knobbygb]

This one's BD - looks like they wanted in on the act too.. .. .Have had 'tax' refunds from BA before - a couple of years ago though.

[tiger burn]

Each time I've had unused tx, I've returned them to my travel agent (trail finders)with an explanatory letter & have received tax refunds within 6 weeks, usually as a cheque direct from TA. By law the airline must refund tax on unused tx.You could check your travel insurance to see if they cover legal advice. . .. .Who is the airline? Name & shame!

[Boss Raptor]

Can anyone identify the appropriate regulation and/or legal precedent that ensures our tax is returned?

We need input from a Barrister or specialist here please ?

[flypastpastfast]

I wish we could get some real legal opinion on this one, which I think is very interesting. Surely for any business to hold on to money which does not belong to it is nothing but theft.


The money belongs either to the passenger or the inland revenue, but not the airline. So, charging an administrative charge greater than the refund due must surely be theft... In those situations where money is not refunded due to punative charges, is it legal for the airline to retain the money (as they know it does not belong to them)?


Even further, under accounting practices, is it indicated as income for the airline. If it were indicated under company accounts then perhaps the Inland revenue could retrospectively reclaim any money not returnd to passengers, as it does not belong to the airlines.

Any full legal opinions available??

From a moral standpoint, is is not very good to retain customers money when it should be returned.

[Hartington]

At about the time that Duty Free was being scrapped in the EU UK airlines got a bit worried that airports would put up their fees. That, in turn would mean the airlines might (would!) have to put up their fares (which they didn't want to be seen doing).

So, the decision was made to take these fees (or at least those applying to UK airports) out of the fare and show them separately on the ticket. They decided to use the "tax" box. Agents took exception claiming they had been earning commission on that element so why shouldn't they continue to do so (they don't earn commission on taxes). Airlines responded by redefining the tax box as "taxes/fees/charges" but it did no good and they lost in court (mind you, last I heard Ryanair were still holding out againts paying back the commission as ordered by the courts on tickets issued between the change and the injunction).

Anyway, the point is that not everything you see in the tax box is a tax controlled by HM Customs and Excise. In fact, probably the only one you see that they have any control over is the tax with the code GB. The UK airport fee is shown as UB. All(?) the others are levied by non UK entities (usually governments, but not always). Therefore, complaining to Customs and Excise is only part of the solution.

However, it MAY not be the airline that's holding the money. If the ticket was bought through an agent then it could depend on how he/she dealt with the refund. It can also depend on how the ticket was paid for in the first place.

IATA agents can either apply for a refund (in which case they have to wait for the airline to action it) or they can complete the calculation themselves and simply process the refund against issues. Indeed, most of the CRSs now provide an electronic method so the refund is processed as quickly as the issue.

Then we come to the method of payment. If the payment method is anything other than a credit card the agent might wait until the refund has appeared on his billing and the payment cycle has completed (with the refund being deducted) before making the refund. This shouldn't take more than 6 weeks but I can accept it might be as much as 10 weeks before that completes.

If payment was by credit card it depends on who was the merchant. If the bill appeared on your card under the name of the agent you bought the ticket from then (daft though this may sound) he has reported it to the airline as a cash sale and the previous paragraph applies. Of course, in both cases you are then in the hands of the agents as to how long it takes after they have realised they've got the money back before they process it.

If the bill on your card appeared under the name of the airline then the agent returns the ticket there. Now you're back to the manner in which the agent returns the refund. If the agent calculates the refund and simply submits it then you're dependent on how the airline processes the billing to the card. If he asks for the refund then you wait while the airline calculates the value and returns it to the agent. Then you wait while the agent subimits it back to the airline again at which point you're once again back to the airline and how they process the billing to the card.

Horrible isn't it?

[Boss Raptor]

That is exactly my feelings FPPF but we need the exact instrument/precedent that we can then act upon...any tax barristers out there ?

Thank you Hartington...the ticket was paid on a CC with the agent as billing party...he has 'applied' to the airline for the refund and we are still waiting for the airline to action it despite chasing...15 months on...this is not an isolated case...Virgin Atlantic stink!!