Insights

AIR's Paul Barnes on why we need to double down on the campaign to reinstate tax-free shopping

Ahead of the Chancellor's Autumn Statement next week, Paul Barnes, Chief Executive Officer of Walpole partner organisation the Association of International Retail (AIR), writes about why the reintroduction of tax-free shopping is essential for boosting our country's tourism sector and GDP, not to mention supporting tens of thousands of jobs in the luxury sector and beyond across Britain...
10th Nov 2022
Insights AIR's Paul Barnes on why we need to double down on the campaign to reinstate tax-free shopping

When the newly appointed Chancellor, Jeremy Hunt, announced that he was abandoning almost all of the commitments in his predecessor's Growth Plan, only one of these lost policies was widely lamented. Cancelling the proposed introduction of tax-free shopping would, he told Parliament, save £2 billion each year. But nobody believes this is the true picture, not even the Treasury.

A new report from Oxford Economics, commissioned by the Association of International Retail (AIR) and released next week, takes a detailed look at the full impact of introducing the scheme. Far from costing the Treasury £2 billion a year, Oxford Economics will say that the boost to international tourism will result in a net gain for tax-payers.

Walpole, AIR and others have long argued that the additional VAT raised from increased spending by international visitors on hotels, restaurants, travel, culture and leisure, combined with more indirect tax revenues, would more than offset any VAT refunded.

So who is right? The difference between the two estimates is so big, and the negative impact of being the only European country not to offer tax-free shopping to international visitors is so great, that we can’t just ignore the issue. That’s why the only sensible thing is for the Chancellor to order an independent assessment of the full economic impact from the Office for Budget Reasonability.

That’s what we are all calling for. It’s what last month’s report by the Commons DCMS Select Committee into “Promoting Britain Abroad” has called for, following evidence presented to their inquiry by Walpole and AIR. It’s what the Chairman of the Treasury Select Committee has called for.

If, as we expect, an OBR assessment finds that the Chancellor’s decision to abandon plans for tax-free shopping was based on incomplete and inaccurate information, and that, in fact, it doesn’t cost the Treasury,  but actually boosts GDP by billions of pounds and it supports tens of thousands of jobs across the UK, then we have a good chance of him reversing decision.

Because, once next week’s Budget has laid out the Treasury’s plans for spending, tax and borrowing, the Government will need to find cost-free measures to produce economic growth  - and quickly.

AIR, Walpole and other campaigners don’t expect an announcement in next week’s Autumn Budget, but we are laying firm foundations so that, as we go into the new year, we can make one more push to get tax-free shopping restored. And then we can work together to make Britain the world’s number one destination of choice for international shoppers.

internationalretail.co.uk

If you would like more information about Walpole's campaign to reinstate tax-free shopping for international visitors, please email our team on [email protected]

Picture: Henry Poole & Co.

Related Articles

Walpole quoted in DCMS Select Committee tourism report
Walpole News
25th Oct 2022
Walpole quoted in DCMS Select Committee tourism report
The DCMS Select Committee has published a report on inbound tourism and promoting Britain abroad, which highlights the importance of tax-free shopping to tourism in the UK – and directly quotes our recent research to emphasise the contribution of the sector to UK employment...
Walpole welcomes the appointment of Rishi Sunak as Prime Minister
CEO Letter
25th Oct 2022
Walpole welcomes the appointment of Rishi Sunak as Prime Minister
Following the resignation of Liz Truss, Rishi Sunak is now the leader of the Conservative Party. Here, Walpole's Chief Executive Officer Helen Brocklebank sends her congratulations - and breaks down what the new Prime Minister needs to do to support the British luxury sector...
Walpole comment: Chancellor reverses decision to reinstate tax-free shopping
CEO Letter
17th Oct 2022
Walpole comment: Chancellor reverses decision to reinstate tax-free shopping
Following the news that the new Chancellor of the Exchequer, Jeremy Hunt, has reversed his predecessor's decision to bring back tax-free shopping for overseas visitors to Britain, Walpole's Chief Executive Officer Helen Brocklebank shares how and why Walpole will continue to fight for this scheme to be reintroduced...