50,000 jobs at risk if Treasury scraps tax-free shopping

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Tax free duty free treasury rishi sunak covid-19 pandemic lockdown jobs redundancies
The Treasury said that around 92 per cent of visitors to the UK don’t use the VAT retail export scheme
//  Rishi Sunak warned that axing duty-free shopping could result in up to 50,000 redundancies
// Over 40 MPs said the Chancellor’s decision to scrap the system will make the UK “less attractive”

Conservative MPs have reportedly warned Chancellor Rishi Sunak that axing duty-free shopping could result in up to 50,000 job losses.

More than 40 MPs said the Chancellor’s decision to scrap the system next year will make the UK “less attractive” to international visitors, Mail On Sunday reported.

The move could affect not just London, but airports and shopping centres throughout the country including in Edinburgh, Manchester and Bicester Village.


READ MORE: UK retail “least attractive in Europe” if tax-free shopping is axed, retailers warn


The MPs wrote in a letter that they believe this tax rise will set back the government’s levelling-up agenda.

They warned that wealthy visitors will desert London for Paris and Milan.

The Treasury said the scheme mostly benefits the capital and does not support the levelling-up agenda.

However, industry groups argue tax-free shopping is worth £3.5 billion a year and supports 70,000 jobs directly.

They predict a drop of 1.16 million visitors a year, mostly from China and the Middle East.

The Treasury said that around 92 per cent of visitors to the UK don’t use the VAT retail export scheme and extending it to the EU could increase total costs up to £1.4 billion a year.

Last month, Ted Baker, The White Company and Paul Smith collectively wrote to the Chancellor urging him to reverse his decision to end tax-free shopping for tourists in the UK.

Other retailers such as Smythson, Rupert Sanderson and Hackett have also written in an open letter to the Chancellor saying “fashion brands need our country to be open for business”.

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2 COMMENTS

  1. I totally agree with the decision to scrap tax-free shopping. In reality, it’s never tax-free for the consumers, almost all of whom were Chinese in our shops, as the arranging agent and retailer take a slice. It’s a bit of a con really. No, if the visitors can afford to travel here they can afford to purchase items without any VAT reductions. The UK is much cheaper for many of the brands mentioned anyway, and the visitors are using the services within the UK, such as the roads and the NHS, so they should contribute to them like the rest of us have to.

  2. I’m a British citizen but have lived overseas for long enough to qualify for this.

    It’s a bit of a scam as the Tax refund agents keep a good share of the tax saved so you only really get about 12% back.

    However it is a helpful saving.

    No worries, we usually spend a couple of weeks in Europe as well as in London so we’ll do our clothes shopping there instead.

    Hard to imagine that the fools in the Treasury would be so determined to score an own goal.

    But at least it help “level up” London with the north of England. SMH

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