London’s West End retailers are warning of mounting losses from the government’s decision to scrap tax-free shopping, with fresh data showing sales slipped by £310m in the first half of 2025.
The figure, released by the New West End Company, represents a 40% increase on the £220m lost in the same period last year and marks the sharpest half-year decline since the policy was abolished.
According to the group, which represents occupiers and landlords across Oxford Street, Regent Street and Bond Street, the cumulative impact since the start of 2023 has reached almost £1.4bn in unrealised sales.
The survey found that 83% of West End firms say the absence of tax-free shopping is directly “damaging trading performance,” with 92% reporting reduced international spend and 81% citing fewer international visitors.
Nearly all (96%) believe that potential tourist spend is being diverted to rival cities such as Paris and Milan.
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Beyond the issue of international visitors, businesses also flagged broader pressures, with three-quarters reviewing staffing levels and half rethinking investment in the UK amid rising operating costs and shifting consumer behaviour.
This comes despite global travel and retail spend continuing to climb. The World Travel and Tourism Council (WTTC) predicts worldwide international visitor spend will reach $2.1 trillion in 2025, surpassing pre-pandemic highs by $164bn.
New West End Company CEO Dee Corsi said: “The data is clear: losing tax-free shopping is costing UK businesses, with the value of unrealised sales growing year-by-year. And with the high cost of doing business in the UK compounding the pressure, many businesses are being forced to review their staffing or investment decisions.
“But it doesn’t have to be that way. Tax-free shopping presents a rare, low-cost opportunity for the Government to back Britain’s near-term growth, create jobs, and give our businesses their competitive edge once more. Not only is the scheme understood by global consumers, backed by business. The time to act is now, before the window of opportunity closes.”
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