UK (Parliament Politic Magazine) – Retailers are intensifying their pressure on the UK government regarding the controversial tourist tax, which eliminated VAT-free shopping for visitors to Britain. This mounting pressure will reach a new level with an upcoming Parliamentary debate.
Thanks to a successful lobbying campaign, the Treasury will now listen to and formally address proposals to reinstate tax-free shopping for international visitors during a 90-minute Westminster Hall debate on 7 September.
Since the elimination of this benefit, the Association of International Retail and New West End Companies has been spearheading a campaign to restore it, with the support of influential retailers and renowned brands who have consistently highlighted the negative impact caused by its removal at the beginning of 2021.
Affluent Tourists Visiting Milan And Paris Instead Of London
Burberry and Mulberry have recently highlighted the negative effects of the current tax policies in the UK. There is ample evidence to support the claim that wealthy tourists are choosing to visit Paris and Milan instead of London, Edinburgh, Cardiff, and other locations in the UK, in order to make their luxury purchases.
It is worth noting that Britain is now the only country in Europe that does not offer tax-free shopping to international visitors. This not only means that the UK is missing out on the spending of a significant number of non-EU tourists, but it has also lost the opportunity to attract EU consumers who would have spent generously in the country before it left the bloc.
Prominent organizations advocating for the reintroduction of tax-free shopping in the UK include the British Chambers of Commerce, Walpole, the British Retail Consortium, and VisitBritain, the national tourism agency.
Campaigners Claim Tax-Free Shopping Could Boost The Economy
Campaigners argue that, in contrast to the Treasury’s projections, an independent report from Oxford Economics suggests that reintroducing tax-free shopping would have a substantial positive impact on the economy. According to the report, this measure could potentially boost the economy by over £4 billion annually and create 78,000 jobs.
Sir Geoffrey Clifton-Brown MP, who has successfully secured and will open the debate, emphasizes the crucial need for a thorough discussion of this topic in Parliament. He hopes that this debate will effectively convey a strong message to the Chancellor prior to the Autumn statement.
Dee Corsi, Chair of the Association of International Retail and CEO of the New West End Company, underscores the significance of Parliament’s decision to debate tax-free shopping. The fact that this issue has garnered cross-party support is indicative of its profound impact on Britain’s economy and businesses. The implementation of the ‘tourist tax’ has already inflicted considerable harm on numerous businesses
Ending Tax-Free Behavior Could Change The Traveler Behavior
“Despite the return of international visitors, spending data consistently indicates that Britain is performing below expectations compared to the rest of Europe. This contradicts the Treasury’s previous assessment that ending tax-free shopping would have minimal impact on the behavior of international travelers.
Now, we have an opportunity to shed light on the negative effects of the ‘tourist tax’ on the British economy and discuss the advantages of reinstating it. By doing so, Britain would stand out as the sole major European country where 450 million EU residents could enjoy tax-free shopping.
This could potentially unlock a vast new tourism market and simultaneously enhance our appeal to visitors from distant lands. While we cannot undo the damage already inflicted, we can still prevent long-term, detrimental changes in shopper behavior.”
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MPs Support Tax-Free Shopping
Members of Parliament (MPs) supporting the ‘Scrap the Tourist Tax’ movement have successfully secured a parliamentary debate to advocate for the reintroduction of tax-free shopping for international visitors.
The Treasury will listen to and formally address the proposals during a 90-minute debate in Westminster Hall on 7 September. Currently, Britain stands alone among European countries in not offering tax-free shopping to international visitors, a benefit that was eliminated after the conclusion of the Brexit transition period at the end of 2020.
Sir Geoffrey Clifton-Brown MP, who will initiate the debate, has spearheaded the campaign for reinstatement in Westminster on behalf of the Association of International Retail and New West End Company.
He expressed, “It is of utmost importance that this matter is thoroughly discussed in Parliament, as it will hopefully convey a strong message to the Chancellor prior to the Autumn statement.”