Northern Ireland Protocol: HM Treasury declines to say if Protocol is reason NI is only part of UK to miss out on duty free shopping with EU

Travellers leaving the province are not allowed to take advantage of tax-free offers when heading to either Great Britain or European countries.

And Belfast International Airport has warned that it is losing out on vital custom to the southern competitors as a result.

But the Treasury says it can’t allow duty-free shopping for travellers heading to GB because NI is part of the UK’s tax area.

And the European Commission has given the same reason for visitors to the EU, arguing the Province is following its tax rules under the NI Protocol, the Sunday Telegraph reported.

Graham Keddie, Managing Director of Belfast International Airport said: “It is ridiculous that Northern Ireland is the only part of the UK that doesn't benefit from duty free for EU flights.”

He added: "Effectively the UK Government is giving NI passengers a greater incentive to fly out of RoI airports that only harms the local economy. I strongly urge the Treasury to reconsider and act in partnership with its vital aviation industry to secure jobs, businesses and livelihoods across the country."

Belfast City Airport also affirmed that the current arrangements “put Northern Ireland at a disadvantage and we await clarity on the situation”.

NI economist Dr Esmond Birnie said NI is going to be treated in a peculiar way in terms of tax treatment, “we deserve to be told the real and full reasons for that”.

He added: "There is no official denial from the Treasury that this is to do with the Protocol. It is, however, very puzzling that Northern Ireland can’t have duty free in either direction either from NI to the EU or from NI to GB. Why are the Northern Ireland airports being treated differently from those in GB in terms of the restoration of duty-free on flights to the EU?"

Baroness Kate Hoey said the fact that NI is now governed by both UK and EU tax rules at the same time means it has been left in "a twilight zone... leading to a ridiculous worst of both worlds on Duty Free from Belfast".

As well as raising a Parliamentary Question to highlight the problem, she has also written to the Government demanding that it fixes the issue.

She said the current situation was “a joke” and that neither side wanted to publicly admit that it was the Protocol that was at fault. “If Northern Ireland remains an integral part of the UK as does the rest of Great Britain, why can I get duty-free flying to EU countries from anywhere in Great Britain but not from airports in Northern Ireland? It doesn't make sense,” she added.

Former Stormont Economy Minister, DUP MLA Gordon Lyons, said: "This is an issue which we have highlighted before. The Treasury has been cagey on the issue. The reality is that Northern Ireland airports are already at a disadvantage given the competition in the Republic of Ireland both for domestic and international flights. The Government needs to seriously consider this matter."

A spokesman for HM Treasury declined to offer any comment in relation to the Protocol on the matter.

He said: “Duty-free shopping is based on a relief from excise duty because the goods were purchased outside the UK. Northern Ireland is an integral part of the United Kingdom’s tax territory, and as such applying duty free arrangements would risk undermining business in both Great Britain and Northern Ireland.”

The European Commission was also invited to comment.