Duty-free bargains at airports will end on goods including perfume, clothing and electronics from January 1.
Ministers announced tax savings will now only apply to sales of alcohol and tobacco.
The decision, which affects all outbound passengers, has been called a ‘hammer blow’ to struggling airports. As much as 40 per cent of their income comes from airside retailers.
Industry experts say it could lead to thousands of job losses as shops pull out of airports.
They fear some regional airports could even go bust.
Ministers announced tax savings will now only apply to sales of alcohol and tobacco
It has intensified calls for an airport Covid testing regime to re-open Britain’s skies.
Karen Dee, chief executive of the Airport Operators Association, said: ‘The Government have once again shown a complete lack of awareness for the jobs and businesses on the line in the aviation sector.
‘Our industry is weathering the worst crisis in the history of civil aviation, it can scarcely afford another hammer blow like this.
‘By removing the airside statutory concession, the Government is needlessly harming the revenue of retailers and airports. Passengers will be disincentivised from making purchases as they travel through the UK.
‘Many foreign visitors will now choose to go elsewhere, attracted by the beneficial tax and excise regimes of our European competitors. This will harm not only UK airports, but the high street stores that hugely benefit from tourists.’
Industry experts say it could lead to thousands of job losses as shops pull out of airports
Francois Bourienne, chair of the UK Travel Retail Forum, added: ‘This decision puts the UK out of step with travel retail systems around the world, completely dis-incentiveses tourists to visit the UK and British passengers making purchases as they go on vacation abroad, and puts UK airports and travel retail at a substantial disadvantage against their European counterparts after Brexit.
‘This will lead to significant additional job losses in the travel industry. It may well be the best gift the UK could have given the EU as well as a massive blow for UK plc.’
‘We urge the Government to immediately review its decision and act swiftly to ensure jobs, businesses and Britain’s place as a premier travel hub are not lost.’
The Treasury said the decision was taken ‘as the tax concession was not always passed on to consumers in the airport’