Paris, Rome and Berlin can’t believe their luck! When Britain should be seizing the opportunities of Brexit, scrapping tax-free shopping for international tourists is a spectacular own goal, writes SIR ROCCO FORTE
What a spectacular own goal for UK plc! Just as we should be seizing the opportunities of Brexit to create a more dynamic economy attractive to foreign visitors and investors, the Treasury has decided to scrap tax-free shopping for international tourists.
It did this at the worst possible time, after the pandemic ripped the heart out of the British hospitality sector and the high street.
Liz Truss’s short-lived government recognised the damage, and announced that it would stop slapping foreign shoppers with VAT on their purchases. At a difficult time for the economy, here was the Treasury helping beleaguered businesses weather the storm. Imagine my shock, therefore, when Jeremy Hunt announced a reversal of the move, claiming it would save the Government £2 billion a year.
Figures from Visit Britain show that shopping is one of the most popular reasons cited for visiting the UK. British business made £3.5 billion in tax-free sales to tourists every year. These visitors did not just spend in retail stores – their custom supported hotels like mine, restaurants and theatres.
It did this at the worst possible time, after the pandemic ripped the heart out of the British hospitality sector and the high street
Experts tell us this was worth at least £10 billion a year to the UK’s wider economy.
But now we have suddenly started charging 20 per cent more than other countries do for the same goods, international visitors we should be doing everything we can to encourage to come here won’t hesitate to go elsewhere.
Every single country remaining in the EU now offers tax-free shopping while we don’t, putting our economy at a significant disadvantage.
Paris, Rome and Berlin can’t believe their luck.
How depressing to learn that a great British brand like Mulberry is now closing the doors of one of its flagship stores as a result.
According to Oxford Economics, the reintroduction of tax-free shopping would attract more than 1.6 million extra visitors a year to the UK by 2025. We can’t afford to turn them away.
However unfashionable tax cuts may be under this Government, the Chancellor must think again.