London Mayoral candidate calls on Rishi Sunak to scrap plan to end duty free shopping for tourists

Rishi Sunak - UK Parliament official portraits 2017

The Conservative party’s candidate for Mayor of London, Shaun Bailey, has urged chancellor Rishi Sunak to scrap a plan to end duty free shopping for tourists.

The Treasury is currently saying that VAT refunds for all overseas visitors will be stopped next year unless the goods are dispatched directly to their home countries.


No.11 estimates that VAT refunds cost the country £521 million in lost taxes every year.

Retailers, particularly those in the luxury goods sector, believe the move will drive high spending tourists from Asia, America and the Middle East to rival markets like Paris and Geneva.

Lobbying by the likes of The Watches of Switzerland Group and Global Blue, a specialist in securing VAT refunds, is intensifying.

In an article quoted by London’s Evening Standard, Mr Bailey writes: “I appreciate that we need to save money, but there’s a real risk that ending duty-free shopping will cost us more than it saves.”

He said tourists were experts at finding the best deals among different countries, as shown by the 38% surge in tourist duty free spending that followed sterling’s fall after the 2016 Brexit referendum.

A recent poll by Global Blue found that three in five high-spending tourists from the Middle East, China and the Far East would no longer visit the UK if these duty-free changes go into effect.

“Fewer tourists mean less spending and, ultimately, fewer jobs. In the middle of a pandemic, we can’t afford to let that happen. So I’m asking you to retain the duty-free scheme as it is,” Mr Bailey urges.

Global Blue, which has launched its own campaign against the proposed change to VAT, has calculated the change next year could cost the economy £6 billion a year in lost tourist spending, reducing tax revenues by £3.4 billion as tourists choose to shop in Paris and Milan instead.

French president Emanuel Macron is looking to exploit the opportunity created by The Treasury’s plan by making French duty free allowances more generous in a bid to win over London tourists, the Evening Standard reports.

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