Don't show boarding cards unless airport retailers pass on tax discounts, says Martin Lewis

Update: 2.46pm, 8 October 2015: Since publishing this news story, MoneySavingExpert.com founder and editor, Martin Lewis, has written a boarding pass mythbusting blog - see 'You do have to show your boarding pass at duty free' blog.

Passengers travelling outside of Europe should refuse to show their boarding passes when shopping in airports in a bid to encourage retailers to pass on VAT discounts to shoppers, Martin Lewis, founder and editor of MoneySavingExpert.com is urging.

Goods sold to someone travelling from the UK to outside the EU are exempt from VAT – the standard rate is 20%. But there are claims that some retailers are using the relief to boost their coffers.

Martin answers your questions on this, including whether you're legally required to show your boarding pass in airport shops, in his video below.

Why has this issue come to light now?

The issue has to come to light following an investigation by the Independent newspaper, which revealed that many airport stores were asking passengers to present their boarding passes when making a purchase so they could use the information to claim VAT relief.

However, the newspaper claimed that stores such as Boots and WH Smith did not pass on these savings to customers by cutting prices on their shelves.

What does the Treasury say?

Financial Secretary to the Treasury, David Gauke, says: "The VAT relief at airports is intended to reduce prices for travellers not as a windfall gain for shops.

"While many retailers do pass this saving on to customers it is disappointing that some are choosing not to. We urge all airside retailers to use this relief for the benefit of their customers."

As outlined in Martin's video, the Treasury confirms it is not a legal requirement for passengers to show boarding cards when buying goods, other than on duty free items such as alcohol and tobacco, as these carry an additional charge on top of the VAT.

Although if airside retailers don't provide proof that passengers have bought goods from the UK and are travelling outside the EU, they'll have to pay the standard VAT rate, according to HM Revenue and Customs (HMRC).

Additional reporting by the Press Association.