{"id":283037,"date":"2025-07-22T17:13:12","date_gmt":"2025-07-22T17:13:12","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/283037\/"},"modified":"2025-07-22T17:13:12","modified_gmt":"2025-07-22T17:13:12","slug":"britain-is-losing-billions-from-the-cancellation-of-tax-free-shopping","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/283037\/","title":{"rendered":"Britain Is Losing Billions From the Cancellation of Tax-free Shopping"},"content":{"rendered":"

\n\tLONDON<\/a> \u2014<\/strong> Napoleon famously referred to England as a \u201cnation of shopkeepers,\u201d but what he didn\u2019t mention was how stubborn and persistent those shopkeepers were, and continue to be, in the face of government opposition.<\/p>\n

\n\tFollowing Walpole, the British Fashion Council, Savile Row<\/a> tailors, and myriad brands, the Association of International Retail, or AIR, has become the latest retail body to persist in pressuring the government for the reinstatement of tax-free shopping, which was canceled in 2021 after Britain quit the European Union.<\/p>\n

\n\tSpecifically, AIR wants the tax-free shopping program to be part of the new visitor economy growth plan, which is being drawn up by the government\u2019s department for Culture, Media and Sport. The plan is set to launch in the fall.<\/p>\n

\n\tAIR argues that reinstating tax-free shopping would bring 3.7 billion pounds to the economy annually and make Britain \u201cthe global shopping capital.\u201d <\/p>\n

\n\tThis week, it submitted a paper to the government asking for the creation of a \u201cworld-beating new VAT-free shopping scheme\u201d that would favor all international visitors. It also argued that Britain could be the only large European country offering VAT-free shopping to the 450 million EU residents, now that the U.K. is no longer part of the EU.<\/p>\n

\n\tShopping by visitors from the EU alone, it said, would create at least 73,000 new jobs.<\/p>\n

\t\t\t\t\t\t\"Shoppers<\/p>\n

\t\t\t\t\tShoppers on New Bond Street in London<\/a>. <\/p>\n

\t\t\t\t\t\t\t\t\tManuel Valcarce\/WWD<\/p>\n

\n\tValue added tax on goods currently stands at 20 percent, and Britain\u2019s \u201ctourist tax,\u201d as it\u2019s now known, has been driving high-end shoppers out of the U.K. onto the Continent to make their purchases.<\/p>\n

\n\tTourists might swing through London to see Buckingham Palace, have tea at Fortnum & Mason, and go to the theater, but they\u2019ll happily hop on a train or a plane to purchase designer goods in Paris or Milan rather than at Harrods<\/a>, Selfridges<\/a>, or John Lewis<\/a>.<\/p>\n

\n\tThe document also forecasts that every part of the U.K. would benefit because EU visitors spend half their money outside London.<\/p>\n

\t\t\t\t\t\t\"Ralph<\/p>\n

\t\t\t\t\tRalph Lauren\u2019s London flagship on Bond Street.<\/p>\n

\t\t\t\t\t\t\t\t\tManuel Valcarce\/WWD<\/p>\n

\n\tUntil 2019, the tax-free program generated billions of pounds in sales each year, mainly from high-spending tourists from China, Russia, the Middle East and the U.S.<\/p>\n

\n\tAIR argues that if the tax-free shopping plan were reinstated, tourists would not only shop more, they would also spend additional money in hotels, restaurants, and on travel, culture and entertainment, all of which would generate additional VAT for the U.K. treasury.<\/p>\n

\n\tThe previous Conservative government canceled VAT-free shopping because it believed it would lose too much in tax revenues by extending the scheme to EU visitors. That government, and the current Labour one, also didn\u2019t like the optics of giving tax breaks to rich foreigners during a cost-of-living crisis.<\/p>\n

\n\tBut the strategy has backfired, and only made the shopkeepers poorer, and angrier.<\/p>\n

\n\tRocco Forte<\/a>, chairman of Rocco Forte Hotels and a longtime campaigner to restore tax-free shopping, said it\u2019s clear that retail and other trades \u201chave suffered hugely thanks to the end of tax-free shopping under the last government. We see it with customers at our hotels who used to come laden with parcels. Now they spend less time with us and go on to shop in Paris or Milan.\u201d<\/p>\n

\n\tHe added: \u201cThis is a huge own goal which could be quickly rectified and boost the economy and the jobs market. Restoring tax-free shopping also represents a significant Brexit opportunity as the U.K. would be able to offer savings to a new market of 450 million EU consumers, thanks to our place outside the EU. The U.K. needs to pull every lever to promote economic growth and this should be top of the list.\u201d<\/p>\n

\t\t\t\t\t\t\"Dior<\/p>\n

\t\t\t\t\tDior on Sloane Street in London.<\/p>\n

\t\t\t\t\t\t\t\t\tKris Piotrowski<\/p>\n

\n\tMichael Wainwright, chairman of the jeweler Boodles<\/a>, noted that every one of the U.K.\u2019s EU rivals offers tax-free shopping for international visitors, and argued that Britain is losing out.<\/p>\n

\n\t\u201cWe would encourage the government to look at this urgently, as all the independent analysis shows that a new tax-free shopping scheme would more than pay for itself thanks to the extra spending that would be stimulated across the economy, not just in retailers but in hotels, restaurants, tourist attractions, taxis and so on. It would also mean that the U.K. would become the only place in Europe where EU shoppers could shop tax-free \u2014 a huge opportunity for our economy,\u201d he said.<\/p>\n

\n\tOn Friday, following the first-quarter results announcement, Burberry CEO Josh Schulman<\/a> also appealed for the restoration of the scheme.<\/p>\n

\t\t\t\t\t\t\"A<\/p>\n

\t\t\t\t\tThe Burberry<\/a> flagship on Bond Street in London.<\/p>\n

\t\t\t\t\t\t\t\t\tNoorunisa\/WWD<\/p>\n

\n\t\u201cUnfortunately, we still continue to have the issue with international consumers who are not shopping in the U.K. to the extent that we would like, due to the lack of a VAT refund scheme in our home market. This is a shame, and frankly, we would want to see policies from our government that would encourage tourism here, because all luxury brands and all retail brands would benefit from that,\u201d he said.<\/p>\n

\n\tSchulman added: \u201cIt could be a real lever for growth in the U.K., and a wonderful opportunity for our customers to be able to come to our flagship stores in London and buy one of our trenchcoats that is made right here in England. And frankly, it would be a great opportunity for our customers, for our stores, and a great opportunity for the U.K. to become the number-one shopping destination in Europe.\u201d<\/p>\n

\n\tIn her exit interview with WWD last year, Caroline Rush<\/a> said that even after stepping down as CEO of the British Fashion Council she would continue to advocate for tax-free shopping.\u00a0<\/p>\n

\n\t\u201cWe\u2019ve got the evidence, we know the benefits it would bring to the U.K., to businesses and to the treasury,\u201d she told WWD in an exclusive interview. \u201cIt\u2019s not about costing the country money, but about supporting the industry, creating opportunities and delivering revenues. I will continue to champion that,\u201d Rush said.<\/p>\n","protected":false},"excerpt":{"rendered":"LONDON \u2014 Napoleon famously referred to England as a \u201cnation of shopkeepers,\u201d but what he didn\u2019t mention was…\n","protected":false},"author":2,"featured_media":283038,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5018,3,4],"tags":[748,53396,106198,393,4884,106199,257,1144,46907,712,16,15,1764],"class_list":{"0":"post-283037","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-britain","8":"category-uk","9":"category-united-kingdom","10":"tag-britain","11":"tag-burberry","12":"tag-caroline-rush","13":"tag-england","14":"tag-great-britain","15":"tag-josh-schulman","16":"tag-london","17":"tag-northern-ireland","18":"tag-savile-row","19":"tag-scotland","20":"tag-uk","21":"tag-united-kingdom","22":"tag-wales"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114898010708466011","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/283037","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=283037"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/283037\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/283038"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=283037"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=283037"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=283037"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}