RISHI Sunak is facing calls from the travel industry to axe the tax on Covid tests before the return of foreign holidays.
The Chancellor is under pressure to drop VAT charges on PCR tests which can cost around £120 each.
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Airlines chief Willie Walsh wants all coronavirus tests to be VAT-free.
He said: “The government should not be taking a 20% premium on what has become an essential service. And VAT on testing is an unnecessary barrier to the very travel that this initiative is trying to facilitate.”
The airlines want travellers from low-risk countries to be allowed to take lateral flow tests which are cheaper and quicker.
Walsh said: “PCR testing is expensive, inconvenient and, in short supply in some destinations. Studies show that the best rapid tests could deliver similar levels of accuracy and put the cost of travel within the reach of many more people.”
British Airways chairman Sean Doyle said the government needs to be “more ambitious” in getting Global Britain back on track – allowing holidays to resume and families to reunite.
Travel consultant Paul Charles, from The PC Agency, said: “The travel sector needs all the support it can get from hover right now and removing VAT altogether on Covid tests is logical and short-term.
The aviation sector wants an investigation into the costs calling on the Competition and Markets Authority to launch a probe.
The move follows Transport Secretary Grant Shapps saying he wants to clamp down on any “profiteering” from testing firms.
Ministers have put in place a traffic light system grading countries under a framework which includes a ten-day isolation period and two tests from amber and red countries.