Heathrow steps up pressure over tourist tax

RISHI SUNAK has been accused by Heathrow airport of tarnishing Britain’s reputation with his tourist tax, piling pressure on to the Chancellor to axe the levy in next month’s Budget.

Heathrow claimed the Prime Minister was “turning away international shoppers” as a result of his decision to scrap Vat-free purchases for overseas visitors after Brexit.

The UK’S largest airport has added to pressure on Mr Sunak and Jeremy Hunt, the Chancellor, to rethink the policy, which has weighed on demand among tourists to pick up luxury items on Britain’s high streets and airports.

Mr Sunak ended Vat-shopping for overseas visitors in 2020 when he was chancellor. The Treasury has since argued that reinstating it now could cost £2bn a year in lost tax revenue.

Yesterday, Heathrow said: “While exports are thriving, Britain has shut the door on home-grown growth, turning away international shoppers through the tourist tax and tarnishing the UK’S reputation as a competitive country to spend and do business with.”

Senior Tory MPS joined calls to scrap the tourist tax yesterday. Sir Jacob Reesmogg, a former business secretary, said: “If the Treasury took a more dynamic approach, they would realise that this tax costs both the economy and the Treasury money.”

Sir Iain Duncan Smith, a former leader of the Conservative Party, warned the Chancellor that removal of tax-free shopping for visitors has had ripple effects on the wider economy and will see sales go to Milan and Paris.

“If you talk to hoteliers, their takings are down. If you talk to restaurants in those key areas, their takings are down. It’s the same with theatres. Our loss is Paris’s gain,” he said.

Retailers fear the Paris Olympics will see more sales drift away from the UK.