Export Shops

Created on 14 July 2005   Last Modified on the 11th of October 2011

The introduction of new legislation in 2000 establishing export shops was a major breakthrough in the arrangements for handling duty-free and duty-paid sales at airports. It helped operators to overcome many of the logistic problems arising from the abolition of intra-EU duty-free sales, without the need to segregate EU and non-EU passengers.

The abolition of intra-EU duty and tax free sales in July 1999 created a particular problem for airports, as most terminals have a mix of EU and non-EU passengers. Therefore, the shop operators did not know whether a passenger was entitled to buy duty free (non-EU) or not until they presented their boarding card at the till. Following extensive discussions between the UKTRF and HM Customs and Excise, this problem was overcome by the introduction of the Excise Goods (Export Shops) Regulations 2000. These provided that export shops (which replaced duty free shops) could receive and store excise duty-suspended goods for duty free sales to passengers travelling on a non-EU flight, but they could also sell duty and VAT paid goods to passengers on an EU or UK flight. Essentially they granted tax warehouse status to export shops for alcohol products and fine cigars (but not for other tobacco products) such that the point of sale became the duty point for such products. This enabled airport retail operators to use common stock for both EU and non-EU sales, which was a major operational benefit. The Export Shops Regulations provide a classic example of the trade and HM Customs working jointly together to solve a problem, and agreeing a new scheme providing mutual benefits.

HMRC have indicated that the Export Shops Regulations are now in need of updating and they will therefore undertake a formal consultation with UKTRF on this. However the consultation process is unlikely to start before 2011.

Printer Friendly Version

Choose preferred Font: (Arial|Times New Roman| Courier New)