UK excise duty and VAT will be scrapped immediately on alcohol and cigarettes in the event of a no-deal Brexit at the end of October.
Although ‘duty-free’ sales were dropped 20 years ago when consumers were expected to pay excise tax and VAT at the point of purchase (abroad), the announcement means that they now also have the option of purchasing limited alcohol amounts in duty-free shops around Europe.
At present travellers returning from the EU are entitled to unlimited amounts of alcohol and cigarettes (provided that they can prove it is for their personal use) by paying taxes at the point of purchase.
But as from October the Chancellor has promised that they can also bring in a capped amount free of any duties whatsoever in addition.
“As we prepare to leave the EU, I’m pleased to be able to back British travellers,” he stated recently, “We want people to enjoy their hard-earned holidays and this decision will help holidaymakers’ cash go that little bit further.”
Miles Beale, Chief Executive of the Wine and Spirit Trade Association, gave the Chancellor’s announcement a cautious welcome.
“The Chancellor’s announcement to reinstate duty-free for travellers moving between the UK and the EU is welcome,” he said, “But it’s also a distraction from the main issue – the UK’s punitively high rates of excise duty. Duty Free is attractive to UK consumers wholly thanks to excessive and increasing duty levels.
“Wine drinkers in Spain and Italy and 13 other EU countries enjoy duty free purchases without having to leave their shores.
“There are much bigger issues which would adversely affect our industry in the event of a no deal Brexit, such as the potential introduction of tariffs on wine. So the Government shouldn’t only tinker with duty free allowances for travellers.”