// Retailers shocked by Treasury’s decision to make UK the only country in Europe to not offer tax-free shopping to tourists
// It changes a potential £2.1bn tax free shopping bonus into a £3.5bn loss of tax-free sales
// New West End Company is now seeking advice around the decision
Retail leaders across UK have expressed shock at the Treasury’s decision to remove the right of tourists to reclaim tax, and are now seeking legal advice in response to the move.
The Treasury’s announcement means the UK will now be the only country in Europe not to offer tax-free shopping to international visitors, who each year contribute billions to the UK economy through tourism.
The withdrawal of the VAT Retail Export Scheme was made by the Treasury late on Friday last week.
According to New West End Company and UKinBound, the move changes a potential £2.1 billion tax free shopping bonus into a £3.5 billion loss of tax-free sales.
They also warn that far from securing an extra £500 million in tax from the £3.5 billion spent each year by international visitors, the move risks those sales moving overseas to Paris, Rome or other nearby European destinations.
“This decision is a disaster for the UK; not only to the West End but to the UK in its entirety,” New West End Company chief executive Jace Tyrrell said.
“Retail and tourism across the UK are already reeling from the impact of Covid-19 and are in need of a boost, not self-inflicted wounds.
“We’re astonished that this decision appears to have slipped through as a footnote on a wider consultation on the expansion of duty-free shopping.
“In seeking to secure millions in tax revenues, the UK is throwing away billions in overseas spending at a time when we need to welcome the world and its wallets to our towns and cities across the UK.”
The New West End Company, along with industry colleagues from across the UK, said it was now considering legal advice on how to best to proceed on the government’s decision to scrap VAT relief for overseas visitors to the UK.
“Another nail in the coffin of Global Britain, scrapping the VAT Retail Export Scheme is a short-sighted action that will negatively impact the UK economy and reduce our global competitiveness,” UKinBound chief executive Joss Croft said.
“Instead of putting up barriers to trade, the government needs to urgently consult with businesses, so it fully understands the ramifications of this policy and adapt it before irreparable damage is done.”