This morning the Government announced the return of tax-free shopping for visitors to the UK.
The Chancellor, Kwasi Kwarteng, told the House of Commons that the Government will put in place a “modern, digital, VAT-free shopping scheme”. This will include modernisation of the scheme in Northern Ireland and the creation of a new scheme in Great Britain. It will enable all non-UK visitors to obtain a VAT refund on goods bought in the UK.
This follows a significant campaign by a coalition of industry voices, including the Association of International Retail, Walpole and the New West End Company, and the insight of a huge number of businesses and Walpole member brands – all of which provided substantial evidence of the impact of the removal of the scheme on their businesses and local economies.
The abolition of this scheme in which came into effect in January 2020 was a huge blow to the UK economy and the £30bn high-end tourism industry. The re-introduction of this scheme will be a much-needed boost for business throughout the UK and fuel our post pandemic recovery.
Walpole Chief Executive Officer, Helen Brocklebank, said: “The luxury tourism sector makes a significant £30bn contribution to the UK economy, and supports a wide ecosystem of manufacturers, retailers, cultural institutions, hotels and restaurants based in all corners of the United Kingdom. This is a hugely welcome measure which will ensure the future of many small businesses and create jobs across the whole of the UK.
“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 UK, and that it is as simple as possible for tourists and businesses alike.”
We are looking forward to talking to Members and to the VAT Res working group over the coming days about the implications and timings of next steps on the decision. We will be in touch again in due course.
If you have any questions, please email our Policiy team.
Picture credit: Johnston's of Elgin
