Holidaymakers face having to pay 20% VAT on Covid-19 tests when they return from sunshine breaks.
The Treasury stands to rake in millions of pounds from taxing polymerase chain reaction tests carried out by government-approved private testing firms on travellers coming into the UK.
International travel is banned until May 17 but once it restarts, arrivals from “amber” and “red” countries face at least two tests, while those from “green” nations need one.
The highly-accurate kits cost an average £130 each.
Senior industry figures called for VAT to be scrapped to ease costs for passengers.
Paul Charles, the chief executive of travel consultancy The PC Agency and co-founder of the Save our Summer holidays campaign, said: “Testing is a requirement and therefore should not have VAT applied.
“The Chancellor urgently needs to look at this because it will choke any recovery, especially from green countries, due to the onerous testing that is needed.”
David Evans, the joint chief executive of Collinson, one of the UK’s biggest testing companies, said: “The very first thing the Government can do to make testing more affordable is to remove VAT right across the supply chain.”
Last weekend it emerged families desperate for a summer holiday abroad will be spared forking out for a coronavirus test for children aged 11 and over before they fly home to Britain.
But only kids aged under five are exempt from being tested when they arrive back in the UK.
No10 said the Government was examining how to slash the cost of tests.
The Prime Minister’s spokesman said today: “We are looking at ways to make these tests acceptable and affordable to the public.
“We have already set out how we would reduce the number of tests required, which would obviously save money, and we will continue looking at other options as we go forward.”
Last week, Transport Secretary Grant Shapps signalled a clampdown on rip-off testing firms, telling Times Radio: “It is the case that these tests are still very expensive.
“I’m looking elsewhere in the world, I see that there are much cheaper options available, so I will be working with the travel industry and the private testing market to drive those costs down before international travel reopens, and I will leave everything on the table, including removing providers who seem to be profiteering from this rather than providing good, well-priced, convenient tests.”