Daily Mail

Chancellor urged to bring back VAT-free shopping


THE Chancellor can give the economy an ‘instant boost’ by reinstatin­g VAT-free shopping for internatio­nal tourists, according to a report.

Jeremy Hunt would raise an extra £350m a year in tax revenues by reinstatin­g the measure, research by economic forecaster Oxford Economics found.

VAT-free shopping allows overseas visitors to claim back 20pc on their purchases in the UK. It was scrapped by then-Chancellor Rishi Sunak when the UK left the EU in 2021.

Former Chancellor Kwasi Kwarteng tried to reintroduc­e the break in September’s miniBudget, but the move was reversed by Hunt weeks later.

It left the UK as the only European country not offering VATfree shopping to internatio­nal visitors. This has fuelled concerns that wealthy Chinese, Middle Eastern and American shoppers will snub shopping destinatio­ns such as London and Manchester in favour of Milan and Paris. At the time, the Government claimed scrapping the tax break would save £2bn per year.

But Oxford Economics said the Government’s estimate is ‘inaccurate’. The study, seen by the Daily Mail, said the Treasury failed to account for the increased number of foreign visitors the scheme would attract.

It said 1.6m more tourists would come to the UK to take advantage of VAT-free shopping, spending £4.1bn in hotels, restaurant­s and other attraction­s.

The benefit of the increased spending would far outweigh the cost of VAT refunds.

Conservati­ve MP Sir Geoffrey Clifton-Brown, deputy chairman of Parliament’s spending watchdog, said the Chancellor should consider a U-turn on the policy. Last week Brian Duffy, boss of luxury watch retailer Watches of Switzerlan­d, said axing the scheme was ‘short sighted’.

 ?? ?? Short-sighted: Luxury retailers such as Hermes claim wealthy shoppers will head elsewhere
Short-sighted: Luxury retailers such as Hermes claim wealthy shoppers will head elsewhere

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