Leading London businesses urge the Government to scrap the tourist tax

In a submission to HM Treasury, the business campaign group, BusinessLDN highlights how scrapping the tourist tax would generate £4.1bn annually for the UK economy as a whole and create an additional 78,000 jobs, according to data from Oxford Economics.

The UK is an outlier in not offering tax-free shopping for international visitors and is seriously losing out as a result. American, Chinese, and Indian visitors can claim back the VAT when they visit competitor nations in continental Europe, such as France, Spain and Italy.

Figures from Global Blue show that 10 per cent of UK spending by international shoppers in 2019 has now moved to EU countries, which have kept VAT-free shopping.

BusinessLDN is also calling on the HM Treasury to ask the Office for Budget Responsibility to undertake an urgent review of the full impact of VAT-free shopping, which would provide an independent assessment of the true costs and benefits of this measure.

John Dickie, chief executive at BusinessLDN, said: “The tourist tax is an economic own goal. Re-introducing the VAT reclaim scheme would boost UK’s flatlining economy through increased spending from international visitors in our shops, restaurants, hotels and more.”

Mayor of London, Sadiq Khan, said: “I have long been calling for the Government to restore tax-free shopping for international visitors. It would help to increase the number of international tourists who visit London and the United Kingdom, which in turn will provide a much-needed boost to businesses and high streets across the country while providing billions of pounds to the Treasury each year.”

Ros Morgan, chief executive of the Heart of London Business Alliance, said: “Culture is the heartbeat of our capital, playing a vital role in the UK’s economic recovery. The Government must review the data and consider reinstating tax-free shopping to incentivise people from overseas to visit the UK and help spur economic growth.”

Wendy Spinks, commercial director at HS1 Ltd, said: “As the operator of the only rail line bringing people from Europe to the UK, we see the economic benefits tourists provide to our economy every day. Restoring tax-free shopping would provide another incentive for people to visit the UK.”

By Mark Adair – Correspondent, Bdaily

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