Ministers are being urged to seize a major Brexit benefit worth \u00a33.7 billion a year by reintroducing tax-free shopping for international visitors. Business leaders say the move would make Britain the \u201cthe global shopping capital\u201d and create tens of thousands of jobs.<\/p>\n
It is hoped the reversal will be announced when Chancellor Rachel Reeves<\/a> delivers her highly anticipated Budget in the Autumn. The VAT retail export scheme allowed international shoppers to recover 20% VAT on high street purchases. But it was scrapped in 2021 after Britain left the EU.<\/p>\n The Association of International Retail (AIR) says that reintroducing tax-free shopping<\/a> for international visitors would benefit every region in the UK.<\/p>\n In a letter to ministers the group says that tapping into the european visitors market alone would help create at least 73,000 new jobs.<\/p>\n They argue that as well as retailers the entire tourist economy has been affected.<\/p>\n Those that have called for a new tax-free shopping scheme include Primark, Marks & Spencer, Heathrow and John Lewis.<\/p>\n The AIR submission, made to the Department for Culture, Media and Sport (DCMS), says a new tax-free scheme is a \u201cunique opportunity for Britain to generate economic growth across the whole country\u201d and \u201cbuild on Britain\u2019s successful and fast-growing tourism sector\u201d.<\/p>\n The document warns that international visitors are increasingly being driven into the arms of the UK\u2019s rivals thanks to the absence of VAT rebates.<\/p>\n It cites new figures showing that in the UK, the post-Covid<\/a> tourism recovery has been weaker here than elsewhere in Europe.<\/p>\n In the UK, visitor numbers had recovered to 96% of their 2019 levels last year, compared to 101.9% in Spain and 100% in France.<\/p>\n The figures on tourist spending are even more stark with spending in the UK last year at 92% of 2019 levels compared to 106% in Spain and 110% in France.<\/p>\n Increasingly, British shoppers are also shunning homegrown outlets<\/a> and buying items on trips to the EU, where they can now claim a VAT refund.<\/p>\n Visit Britain estimates that shopping accounts for 25% of all international visitor spending, more than any other single item, including accommodation, dining or travel.<\/p>\n For every \u00a31 spent in VAT-free shopping, around \u00a34 was spent on goods and services on which VAT was charged.<\/p>\n Derrick Hardman, chair of AIR, said: \u201cWith Britain no longer in the EU, we have the opportunity to become the best place in the world for shopping.\u201d<\/p>\n Rishi Sunak<\/a> ended the tax break when he was Chancellor four years ago.<\/p>\n Kwasi Kwarteng announced he was reintroducing it in his ill-fated mini-Budget in 2022 but Jeremy Hunt<\/a> reversed the decision a month later when he took over the job.<\/p>\n Prominent Conservative Party supporter Sir Rocco Forte, chairman of Rocco Forte Hotels, said: \u201cIt is clear that retail and other trades have suffered hugely thanks to the end of tax-free shopping under the last government.<\/p>\n