Duty Free rules costing NI economy £5m a year

Northern Ireland’s economy is missing out on over £5million a year in additional growth due to an anomaly created by the Windsor Framework that means millions of passengers travelling through NI’s three airports are unable to avail of duty-free purchases in sharp contrast to the rest of the UK and airports on the island of Ireland.

This was the message delivered to Northern Ireland’s MPs in parliament today in a briefing by Belfast International Airport, with independent research concluding the NI economy is losing over £5 million a year because of this issue.

This inequality was created by the Windsor Framework, and was failed to be addressed by the Command Paper. The existing rules between the UK and EU means that NI passengers cannot access the same duty-free savings creating a clear inequality to all other passengers travelling through other airports on the island of Ireland or through Great Britain.

Northern Ireland is formally part of the UK customs union for the purpose of trade agreements but simultaneously aligned with the EU in terms of its customs and excise legislation which treats the UK as a third party.

This causes Northern Ireland to fall into a tax gap where it is prohibited from offering duty free and excise duty exemptions for GB or EU travel. This places Northern Ireland at a clear competitive disadvantage for attracting routes, visitors, and investment. It is an issue that airlines are acutely aware of and has resulted in slower growth of NI’s tourism and aviation sector.

Speaking with local MPs, Belfast International Airport’s Chief Executive, Dan Owens called for Northern Ireland’s representatives to act: “Northern Ireland’s airports are competing for business with the distinct disadvantage by being in the only part of the UK and Ireland that does not currently have access to duty free sales. We raised this issue during Lord Murphy’s review and unfortunately it was not included in the final report despite cross party support and Executive support.

“This is an issue that impacts all local airports, and one all three are united in seeking support for as it is costing the local economy, and local businesses millions of pounds a year. It is also treating the people of NI differently than citizens across the rest of the UK and island of Ireland. The Windsor Framework has resulted in delivering inequality, rather than opportunity for our local distilleries and producers as well as all local passengers.

“Instead of realising ‘the best of both worlds,’ Northern Ireland airports, businesses and passengers have been excluded from benefitting from UK/EU duty free sales because Northern Ireland is simultaneously a member of the UK internal market and subject to EU VAT and excise rules for goods.

“This is an issue that is not only adversely impacting consumers, but it is hampering NI’s tourism and economic growth across the region. This issue is raised with us continually by passengers feeling rightly aggrieved that they cannot make the same purchases as everyone else because of an oversight between the UK Government and the EU. We are not asking for special treatment, just fairness and equality.”

Calling on Northern Ireland’s MPs to act, Peter Newbould, CEO for Lagardère in the UK & Ireland said: “Both Lagardère and Belfast International Airport have invested millions in developing and delivering a world-class duty-free offering at NI’s main airport, and anyone who has travelled through in recent months will have noticed that we have placed local brands and products made in Northern Ireland front and centre of our offering, sitting alongside global brands – as equals.

“These producers create and sustain jobs locally, contributing to NI’s economy and society and we both are proud to do all we can to support and promote them. We ask that the Government will show the same level of commitment to these companies and the people of Northern Ireland and correct this oversight with the EU.”