Top brands call for ban on tax-free shopping to be lifted

HUNDREDS of high-end British brands including Burberry and Harrods have called for tax-free shopping to return to give the industry a billion-pound boost.

A group of 250 high-end labels have said that re-introducing tax-free shopping could potentially attract an additional 600,000 tourists to the UK, leading to another £1.2bn in annual sales.

The brands have argued that since Brexit and the pandemic, from which international tourism has not fully recovered, Britain has lost its position as the preferred retail destination among affluent international tourists.

Every EU country currently offers tax-free shopping to tourists from outside the bloc. But the UK Government abolished tax-free sales on goods at the start of 2021.

Helen Brocklebank, chief executive of Walpole, the body that represents the luxury brands, said: “We are now in a position where the UK can open its doors to the world and welcome back tourists who are looking to spend in our hotels, restaurants, shops and cultural venues up and down the country, all the while aiding economic growth and job creation.”

Before the pandemic, tourism accounted for 4pc of the UK’S economy and had an overall value of £85bn, largely thanks to wealthy guests from around the globe. Those “high-end” tourists, who typically spent 14 times more than the average visitor, are increasingly travelling to and spending their money in cities like Paris, Madrid and Milan.

According to the report from Walpole, that is largely because of the UK’S decision to abolish tax-free shopping.

A typical 20pc value-added tax (VAT) is charged on most goods that are bought in the UK.

The Treasury previously said that scrapping the perk would bring personal duty and tax systems in line with international standards.

It said that Vat-free shopping was still available because retailers are able to offer it to tourists who purchase items in store and have them sent directly to their homes.

Before it was abolished, 69pc of international visitors confirmed that the opportunity of tax-free shopping influenced their decision to visit the UK, according to a survey by HM Revenue and Customs.