Heathrow Airport has warned the loss of tax-free shopping is hurting Britain’s status as a global transport hub.
The airport, which saw passenger numbers rise 4.8% last month, claimed the measure was “curtailing the UK’s global connectivity”.
Its CEO Thomas Woldbye said: “To unlock our full potential to help grow the country’s economy, we need the government to implement policies that support UK aviation’s ability to compete globally.”
While the Treasury has said ditching the tax would cost the exchequer £2bn, campaigners have said it could be setting the Treasury back nearly £11bn annually as two million international tourists are deterred from visiting, the Centre for Economics and Business Research found last year.
The airport said: “Initiatives like the introduction of unnecessary visas for transiting passengers, the absence of tax-free shopping and the recently proposed hike in business rates underscore the need for ministers to take a cross-government approach to policy making.”
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A government spokesman commented: “The UK aviation industry is one of the best in the world and we remain committed to supporting airports to boost our global connectivity and grow our economy.”
Last week, it was revealed that thousands of foreign tourists who previously travelled to the UK for tax-free shopping had switched to Milan and Paris following the loss of the scheme.
While research showed 162,000 tourists from non-EU countries sought tax refunds in the UK in 2019, 20% of those visitors are now claiming them in EU countries that still run the scheme.
Figures from Global Blue, first reported by Bloomberg, found 34,000 travellers had ramped up their spending to more than £3,270 last year, compared to over £2,495 in 2019.
Earlier this month, Selfridges also said it was making job cuts due to the loss of tax-free shopping and reduced luxury spending.
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