Retail bosses have raised concerns that the reinstatement of tax-free shopping for international visitors is looking more unlikely.
Speaking to The Times, Harrods managing director Michael Ward said he does not expect the scheme to be reintroduced anytime soon.
“Is Sunak, ahead of a potential election, going to admit that he totally [messed] up the VAT system? I am not a politician, but I think the chances of that are relatively thin,” he said.
“Then you’ve got the other issue, which is, will the labour government do it? At the moment it’s not on their agenda.”
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Ward said the government should allow a third-party provider, such as Global Blue or Planet, to run a new tax refund scheme for tourists in the UK.
“Ideally, we would like them [the third-party providers] to be able to do it because they’ve proven they can do it in Singapore and in other countries. That would be the optimum way of doing it,” he added.
Similarly, the boss of the outlet shopping centre at the O2 said the government had offered false hopes to businesses.
Back in February, Chancellor Jeremy Hunt asked the Office for Budget Responsibility (OBR) to “examine the costs and benefits” of the scheme, which Rishi Sunak decided to end in 2020.
“We were really excited that we might get listened to and then, overnight, were told it was too expensive to reinstate,” Janine Constantin-Russell told The Times.
“The government seems to just keep pushing that bit of paper from office to office.”
“We’re being asked to do business with one hand behind our backs. We’re having to fight even harder to ensure that tourists visit the UK as they know they can get discounts in other countries such as France and Italy.”
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