Jeremy Hunt paves way for end of unpopular tourist tax

JEREMY HUNT has opened the door to scrapping the tourist tax, amid pressure from business leaders and MPS.

The Office for Budget Responsibility (OBR) has committed to reviewing the levy amid claims that changes to the policy have cost British retailers £1.5bn and driven shoppers to Paris and Milan.

In a letter to Sir Geoffrey Clifton-brown, a Conservative MP, the spending watchdog said it planned to publish the findings alongside the Spring Budget, next month.

Sir Rocco Forte, the Tory Party donor and hotelier who has campaigned against the tax, said the review was a “positive” step, but called for more urgent action.

He said: “This is a no brainer and all this long-winded approach shows is how pusillanimous this government is.”

Changes introduced in 2021 under Rishi Sunak when he was chancellor removed Vat-free shopping for visitors to the UK, prompting criticism from high-end retailers who warned that wealthy shoppers would take their business to other top European cities.

Last week, retail chiefs criticised the “ludicrous” levy and called for it to be revoked. More than 400 business leaders wrote a letter to Mr Hunt, including the chief executives of the Royal Opera House, Burberry, Harvey Nichols and Jimmy Choo, to call for the change.

The letter sent by Richard Hughes, the chairman of the OBR, said he would review the cost of the tax following “evidence on international visitor numbers and their consumption patterns”.

Mr Hughes added that an original calculation, which claimed reinstating the sales tax for overseas shoppers would cost £2bn, had not been vetted by the Government watchdog.

Sir Geoffrey said removing the levy would be “tax positive and it will be of huge benefit to the shops and hospitality venues that will receive extra custom and income from wealthy tourists coming into this country”.

A source close to the Treasury questioned whether the measure would be a priority for the Chancellor come the Budget. Mr Hunt had previously said he remained open to receiving new evidence on the impact of the tax.

A Treasury spokesman said: “We keep all taxes under review and recognise the value that retailers bring to Britain. That is why we announced a £4.3bn business rates package at the Autumn Statement to support businesses and the high street.

“Vat-free shopping remains available for all non-uk visitors buying items in-store and having them sent directly to their overseas address.”