Yahoo Finance The U.K. to Bring Back Tax-free Shopping for Overseas Visitors
LONDON — Tax-free shopping for international visitors is back in the U.K.
Kwasi Kwarteng, chancellor of the Exchequer under Liz Truss’ government, revealed the change Friday as part of an extraordinary 45 billion pound tax-cutting mini-budget plan in the House of Commons.
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The British retail sector, which has been lobbying the government to bring back duty-free shopping since it was given away as part of Brexit in January 2021, was thrilled about the introduction of “a modern, digital, VAT-free shopping scheme.”
Dee Corsi, interim chief executive officer at New West End Company, which represents some 600 retail, restaurant, hotel and property owners in central London’s core shopping areas anchored by Bond, Oxford and Regent Streets, said the reintroduction of tax-free shopping is “a great victory for London’s international centers.”
Corsi pointed out that in 2019, international visitor sales generated 28.4 billion pounds for the U.K. economy, and shopping was the single biggest element of that spending. Now with duty-free shopping back, she is confident that “we can exceed this figure in the years to come.”
James Raynor, CEO of Grosvenor Property U.K., which owns and manages the London Estate in Mayfair and Belgravia on behalf of its owner the Duke of Westminster, said, “International tourism is vital for the health of the West End and drawing in visitors to the U.K. This much-needed, sensible reintroduction of tax-free shopping for tourists will allow us again to compete more effectively with Paris and Madrid and provide a much-needed boost to the economy.”
Paul Barnes, CEO of the Association of International Retail, believes the reintroduction of tax-free shopping, which roughly costs the British government 1.5 billion pounds a year, will give retailers across the country “a much-needed boost in trade” as international shoppers, especially those from Europe, return to the U.K., and it is set to “deliver swift results as international visitors return in force across the country.”
“Today’s news brings with it a huge new tourist market of over 440 million people from the E.U. — now that Britain is the only country in Europe where EU visitors can shop tax-free — which will be a significant shot in the arm to our retail, hospitality and tourism sectors across the country, with regional airports set to benefit from a surge in their visitor economies,” he said.
British luxury brands also expressed their excitement about this major change.
Thierry Andretta, CEO of Mulberry, said the reintroduction of VAT-free shopping for tourists “will reinstate London and the other major U.K. cities to their rightful place among the top luxury shopping destinations in the world, as well as providing invaluable support to the U.K’s hospitality sector.”
Helen Brocklebank, CEO of Walpole, the association of British luxury makers, and a powerful industry lobby said the Chancellor’s announcement reintroducing tax-free shopping is “a hugely welcome measure [that] will ensure the future of many small businesses and create jobs across the whole of the U.K.
“I am delighted that the Chancellor has listened to the voices of business and the sector which have spent several years highlighting the need for tax competitiveness with other European countries who have similar schemes.
“We will now be working closely with the government in order to ensure that the scheme brings the maximum possible benefits to the U.K. and that it is as simple as possible for tourists and businesses alike,” added Brocklebank.
