Impact of the tax-free shopping incentive on the culture sector

Heart of London has been supporting an ongoing media and political campaign to reinstate tax-free shopping for international visitors to the UK. By abolishing the scheme, the UK is now the only major European country not to offer the incentive.

The problem:

  • This is having a direct impact on the retail sector, and the knock-on effect is harming cultural and hospitality sectors as international visitors lack this incentive to visit the UK.
  • Visitor figures are making a slower recovery to London’s cultural and heritage assets compared to other top European cities, such as Paris.
  • Tourists now experience higher costs for hotels, alcohol and shopping in London compared to other cities around the world meaning that tourists are choosing to visit elsewhere.

London’s cultural and heritage assets are world class, serving as a major driver of tourism to London. The West End Arts and Culture sector’s Gross Value Added (GVA) amounted to an estimated £4.9 billion in 2019, equivalent to 23% of all London’s arts and culture sector output and 1% of Greater London’s economy.

In the West End alone, there are 100 commercial galleries, 78 archive collections, 53 music venues, 45 jewellery design houses, 44 theatres and 11 dance venues, who contribute to attracting 200m visitors a year. Taken together, these perform a powerful ambassadorial role around the globe and promote Britain overseas.

But we must be better in Britain at attracting international tourists, many of whom are high spending, to help drive the UK’s recovery.

According to research by Oxford Economics, tax-free shopping would bring a much needed £4.1billion boost to GDP and support 78,000 jobs.

Heart of London is urging the Government to review the data and consider reinstating tax-free shopping to incentivise people from overseas to visit the UK and help spur economic growth.

If you would like to publicly support the campaign, please email Matt Panteli, Head of Public Affairs,