Tourist tax harms UK’S status as global hub, says Heathrow

HEATHROW airport has claimed Rishi Sunak’s tourist tax is undermining Britain’s position as a global transport hub.

The boss of the UK’S biggest airport said Mr Sunak’s decision, as chancellor, to scrap tax-free shopping for global visitors, plus last year’s levy of a £10 charge on visa-exempt passengers arriving in Britain, curtailed the “UK’S global connectivity”.

The airport claims it is on track for its busiest year ever after passenger numbers rose 4.8pc last month to 6.7m. It also enjoyed its busiest single day since October 2019 when 1,337 planes either took off or landed on April 19.

However, Thomas Woldbye, its chief executive, warned: “To unlock our full potential to help grow the country’s economy, we need the Government to implement policies that support UK aviation’s ability to compete globally.”

Nationals from Bahrain, Jordan, Kuwait Oman, Qatar, Saudi Arabia and the United Arab Emirates are now required to pay a £10 fee when they change flights at Heathrow or enter the UK for a limited period without legal residence or a visa.

The electronic travel authorisation scheme, introduced in November 2023, is due to be extended to most other nationals this autumn and will cover EU, European Economic Area and Swiss nationals by early 2025.

The Government said the scheme would help boost border security and improve travel for legitimate visitors. But Heathrow has argued that applying the scheme to passengers who only ever transit between flights puts UK airports at a disadvantage to major EU hubs.

The fees may already be having an impact, with 19,000 fewer transit passengers travelling from Qatar to Heathrow in the first four months of the scheme. The route recorded its lowest monthly level of transfer traffic for more than 10 years during the period.

Heathrow has also hit out at the tourist tax after Mr Sunak axed Vat-free shopping for overseas visitors in 2020.

The Treasury has claimed scrapping the tax would cost the exchequer £2bn but campaigners argue it may be costing the Treasury almost £11bn annually as it deters 2m tourists from visiting.

A government spokesman said: “Requiring transit passengers to obtain an Electronic Travel Authorisation ensures we make the border more secure and stops people who may use connecting flights to avoid gaining their permission to travel to the UK.”

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