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End of duty-free in January could cost Stansted millions

PUBLISHED: 07:30 27 October 2020 | UPDATED: 11:12 27 October 2020

London Stansteds terminal building  Picture: STANSTED AIRPORT

London Stansteds terminal building Picture: STANSTED AIRPORT

Stansted airport

Stansted’s income could take a multi-million pound hit next year as duty-free shopping ends and coronavirus continues to bite.

In September, the government announced it would start charging VAT on goods bought after going through security at UK airports from January 1 2021.

According to a study by consultancy firm York Aviation, this decision combined with the continued fallout from the Covid-19 pandemic could cost Stansted Airport as much as £80million in 2021.

This loss would make Stansted the third worst affected airport in the UK, but it is believed that the true figures for Stansted are not as bad as predicted in York Aviation’s report.

MORE: Stansted job losses: Union blasts ‘total failure’ of government to help airline industry

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Nevertheless this blow comes after 400 job cuts have already been proposed at the Essex airport.

Manchester Airport Group, which owns Stansted, called the summer of 2020 the “toughest summer our industry has ever seen” after a 90% reduction in demand for travel through its airports since March.

The group asked every employee to take a 10% pay cut for a year, as well as pausing capital investment and non-essential expenditure.

Across the entire aviation industry, York Aviation estimates the government decision to cancel duty-free shopping could mean the loss of 19,400 jobs across the UK and cost the economy as much as £2.1billion.

A statement released by the Treasury in September, which was largely about increasing the amount of tax-free goods passengers can bring into the country, said: “We are also ending tax-free sales in airports of goods such as electronics and clothing for passengers travelling to non-EU countries, following concerns that the tax-concession is not always passed on to consumers in the airport.

“In some instances these tax-free goods are brought back into the country by UK residents, putting high street retailers at a disadvantage.”

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Francois Bourienne, chairman of UK Travel Retail Forum said: “For an industry already on its knees battling the devastating impact of the Covid-19 outbreak, this government misstep is an unnecessary and misguided blow. Airport retailers will be among the hardest hit, with revenues under even greater threat, but most regrettably nearly 20,000 additional jobs and livelihoods across the UK are now needlessly in peril.


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