AIR argues that British consumers have become increasingly savvy, taking advantage of tax-free incentives abroad and travelling overseas to make significant purchases, rather than buying at home.<\/p>\n
The findings are likely to intensify pressure on ministers to reintroduce tax-free shopping for all overseas visitors, including those from the EU, to restore Britain\u2019s competitive position.<\/p>\n
More than 500 business leaders, including the bosses of Burberry, Primark and other big retailers, have joined a campaign calling on Rachel Reeves to reverse the previous government\u2019s policy.<\/p>\n
According to AIR, reinstating tax-free shopping could deliver a major boost to the UK economy, creating 73,000 jobs, generating an additional \u00a33.65 billion a year in GDP, delivering \u00a31.8 billion in regional growth and raising more than \u00a3500 million a year in extra VAT revenue for the Treasury.<\/p>\n
\u2022 Rigid thinking over tourist VAT has left us in a \u00a31.4bn hole<\/b><\/a><\/p>\n Derrick Hardman, chairman of AIR, said: \u201cThe disproportionate increase in British visitor numbers to the EU shows that a new market in shopping-led tourism has emerged. It\u2019s sad to see British shoppers taking their business elsewhere, but they\u2019ve worked out that the tax rebates on the Continent more than outweigh the cost of hopping on the Eurostar or a cheap short-haul flight.\u201d<\/p>\n He added: \u201cIt makes no sense for the UK to remain the only destination in Europe not offering tax-free shopping.<\/p>\n \u201cThanks to our position outside the EU, we now have a unique chance to reverse the policy of the last government and become the world\u2019s shopping capital<\/a> \u2014 offering tax rebates for both EU and non-EU shoppers. All the evidence shows that reintroducing a tax-free scheme would more than pay for itself, thanks to spending not just in retail but across hotels, restaurants, transport and entertainment. This government has promised to pull every lever available to promote growth \u2014 here is an obvious one.\u201d<\/p>\n France has become the most popular EU destination for British VAT-free shoppers, accounting for 35 per cent of spending, with Paris representing three quarters of that. <\/p>\n Shoppers queue outside the Louis Vuitton store on the Champs-Elys\u00e9es in Paris<\/p>\n ALAMY<\/p>\n The group argues that VAT-free shopping has created a new market in tourism, with British travellers spending not just on tax-free goods, but across hotels, restaurants and other experiences. <\/p>\n![\"Queue](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/08\/\/86cc8764-ffa5-4f4a-b184-e7cef6ed6809.jpg\")
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