To support London and the UK’s fragile economic recovery, the Government should reinstate the lowered rate of VAT for international tourists to the UK, also known as tax-free shopping.
Research by Oxford Economics and the Association of International Retail has shown that, rather than costing £2 billion, as HM Treasury has said, reintroducing tax-free shopping would contribute £4.1 billion to GDP annually and support around 78,000 jobs across the UK.
We have supported calls from the Association of International Retail and the New West End Company that urged the previous Government to ask the Office for Budget Responsibility to conduct an independent assessment of the full economic impact of tax-free shopping so that they could make an informed decision as to whether it would be an unnecessary cost or, as projected, a financial lifeline.
December 2022
Supported the research by Oxford Economics, commissioned by the Association of International Retail, which shows that rather than costing HM Treasury money, it would actually generate additional income.
January 2023
Responded to the consultation on The Mayor’s Budget for 2023-24 here, urging the Mayor to support us and New West End Company in making the case to Government for VAT-free shopping (at least in the international shopping centres). VAT-free shopping would provide a significant boost to tourism and a shot in the arm for the West End’s ecosystem, and independent research suggests the upfront cost would pay for itself.
Ros Morgan met with Shadow Chief Secretary Pat McFadden to set out the economic boost that reintroducing tax-free shopping would bring to the UK, and to urge the Labour Party to support it.
We co-signed a letter with the Mayor of London, urging the Chancellor to reintroduce tax-free shopping, covered in the Daily Mail.
Spring/Summer 2023
We have co-signed various letter to the Government urging the reinstatement of tax-free shopping, provided supportive quotes, our chief executive Ros Morgan has written an op-ed for the Evening Standard here, we’ve asked our members to submit data to HM Treasury on how they’ve been impacted by the removal of tax-free shopping, which they can do so here, met with HM Treasury officials as part of a delegation organised by Business LDN to explain our position, and had members of the tax-free shopping campaign speak at our quarterly public affairs steering group.
Summer 2023
In our submission to the Autumn Statement, we urged the Government to reintroduce tax-free shopping for international tourists due to the economic benefits.
September 2023
MPs debated tax-free shopping for international visitors in a Westminster Hall debate – it can be watched again here. We have summarised the debate here.
17 November 2023
In an article for City AM, our chief executive, Ros Morgan, argued that the Chancellor should include tax-free shopping in the Autumn Statement to stimulate economic growth.
22 November 2023
At the Autumn Statement on 22 November, the Government said that it will continue to accept representations on tax-free shopping and consider information carefully. In response to a question from Geoffrey Clifton-Brown MP in the ensuing debate, the Chancellor said:
“We are looking again at the numbers [..] We will review this to see if it is still that expensive, and I hope that it is not.”
You can watch the exchange here.
October 2024
Key partners are currently reflecting on developing a new campaign focused on improving the UK’s international competitiveness – tax-free shopping will be a part of this campaign.