Forte’s fury over refusal to scrap tourist tax

BUSINESSES have responded furiously to the Chancellor’s refusal to scrap the tourist tax yesterday.

Despite cross-party pressure from MPs and more than 500 business leaders, Jeremy Hunt declined to restore tax-free shopping for overseas tourists.

He had asked the Office for Budget Responsibility (OBR) to investigate whether the tax costs Britain more than it raises. But yesterday the OBR said it continued ‘to believe that this measure is unlikely to affect significantly the productive capacity of the economy’.

It flies in the face of research by the

Centre for Economics and Business Research (CEBR) which said the tax is costing the economy £11billion in lost GDP.

Last night, business chiefs and campaigners hit back at the Chancellor’s refusal to act and said they would turn their attention to Labour.

Leading hotelier Sir Rocco Forte, who organised a letter to Mr Hunt demanding he scrap the tax, said: ‘The case for reintroducing tax-free shopping in the UK is clear and overwhelming.

‘As things stand, every country in the EU offers sales tax rebates to tourists while we don’t, meaning the whole tourist economy in the UK is operating with one hand tied behind its back.’

He added: ‘We will now need to persuade Labour as the likely incoming government that reform is a prerequisite for stronger economic growth.’

Phil Lawrie, chief executive of the Silverstone Museum, called it ‘a very obvious own goal’ as the rebate could have been extended to a new market of EU tourists – making it a ‘Brexit dividend’. He said if the levy was scrapped his motor racing museum could cash in more on an international frenzy for Formula 1 while the nearby Bicester Village would also reap the rewards.

Andrew Hinds, chairman of jeweller F Hinds, said: ‘The message from business could not have been clearer that this move is desperately needed to kickstart economic growth.

‘When we should be doing everything possible to boost the economy, sending a message that the UK is closed for business when it comes to tourist spending makes absolutely no sense.’

Tax-free shopping was ended for overseas tourists by the then-chancellor Rishi Sunak in 2021.