Tourist tax means UK is missing out on £1bn ‘Brexit boost’, MPs warn

By Laura McGuire

Britain is missing out on a £1bn pound “Brexit boost” for as long as it fails to reinstate VAT-free shopping for international tourists, MPs have warned.

Many high street retailers, including Mulberry and Watches of Switzerland, have called for the tax relief scheme to be reinstated, after it was scrapped by Rishi Sunak two years ago, when he was Chancellor. The move to scrap the VAT-free shopping scheme has since been dubbed the ‘tourist tax’.

Speaking during a debate on the issue in parliament today, Conservative MP Geoffrey Clifton-Brown said the EU is currently enjoying a “Brexit bonus” at Britain’s expense as international visitors flock to Paris and Spain to enjoy tax-free shopping,.

“Brexit was an opportunity to bring change within our economy to truly benefit the UK creating new opportunities for growth and innovation. Instead, the EU is enjoying a Brexit bonus at Britain’s expense,” he said. “Britain is missing out on a one billion pound Brexit boost.”

Nickie Aiken, another Conservative MP, said international visitors “are the lifeblood” for so many businesses in areas such as Knightsbridge and the West End.

“World famous department stores like Selfridges and Liberty, as well as the luxury brands along Regent Street and Bond Street, rely on international visitors from China, India, USA and the Middle East,” she added.

Recent figures from tax refund company Global Blue show that a staggering 10 per cent of UK spending by international visitors in 2019 has now been diverted to EU countries.

Research by the New West End Company found that 89 per cent of firms it surveyed had reported a decrease in spending by international visitors.

“Speaking to our members, it is clear that the impact of the ‘tourist tax’ is far reaching, affecting retailers, hospitality, F&B and leisure providers,” Dee Corsi, chief executive of New West End Company, said in a statement today.

“Our research shows that it is proving more of a concern than the cost-of-living crisis and inflation,” she said, adding it was “an unnecessary barrier to growth that U.K. businesses do not need in an already challenging economic environment.”