Fortnum’s chief hits out over tourist tax
GOVERNMENT plans for a ‘tourist tax’ on international visitors could wipe billions from spending in Britain, experts have warned.
The tax will hammer London’s West End – already the area worst hit by the sharp downturn in shop visitors during the pandemic – and could cost at least £2 billion across retail, hospitality and other industries.
The removal of the tax-free loophole to help fill Treasury coffers, which comes into force on January 1, will mean tourists will be unable to claim back VAT when they leave the country.
Fortnum & Mason boss Ewan Venters said: ‘I am flabbergasted by the Government’s lack of commercial nous and the lack of nuance with this move.
‘It is predicated on the ridiculous statement from the Government that said visitors are not price sensitive. Well, I am sorry, that is fundamentally wrong.’
Paul Barnes, chief executive of the Association of International Retail, said l ong- distance t ourists who travel from places such as China – which puts £1 billion into shop tills – may instead skip Britain and head to Paris where the loophole remains.
He said: ‘Non-EU visitors spend around £18 billion a year in the UK. Only £3 billion is on shopping, which you could call a “loss leader”, but the remaining £15 billion is vatable. Yet the Treasury has admitted that it only looked at shopping, not the wider impact on the economy.’