Mail win as Hunt calls for review that could kill hated tourist tax

THE Government could be on the verge of scrapping the hated ‘tourist tax’ – in a major victory for the Mail’s campaign.

Chancellor Jeremy Hunt has ordered a review into the levy introduced by Rishi Sunak in 2021, which brought about the end of taxfree shopping for tourists.

The tax has seen tourists desert Britain for neighbouring countries such as France and Italy, where VAT-free shopping for tourists still exists, damaging the UK economy.

But in the strongest sign yet that the Government could bin the tax, the Office for Budget Responsibility has been asked by Mr Hunt to ‘examine the costs and benefits’ of the tax and publish its findings alongside the Budget on March 6.

The move comes after hundreds of MPs, peers and leading figures from across the retail, hospitality and tourism sectors, including representatives from Marks & Spencer, Harrods and Heathrow Airport, have backed the Mail’s campaign to Scrap the Tourist Tax.

Mr Hunt has also come under pressure to reverse the levy from Tory MPs worried that it is unpopular with voters.

Top bosses said last night that tourist spending supports jobs across the country.

Luke Johnson, part owner of bakery chain Gail’s, said: ‘It would be great news if he scraps the tax.

‘Let’s hope he does it, it could be a boost ahead of the Election.’

Last December, Mr Sunak was made to squirm in front of the Commons Liaison Committee by a former Culture Minister who warned his refusal to scrap the tourist tax was harming the economy. Dame Caroline Dinenage urged the Prime Minister to look again at the knock-on impacts of the tourist tax.

A study published by VisitBritain last week found spending by foreign visitors between July and September last year was 10 per cent lower than during the same period pre-pandemic. It also found that spending by Chinese tourists, typically the biggest users of VATfree shopping before it was scrapped in 2021, fell by 41 per cent compared with 2019.

Ministers have attempted to dismiss the concerns of top business leaders by arguing tax-free shopping benefits only luxury brands and the most affluent tourists hunting for a bargain.

The Treasury has previously stated that restoring VAT-free shopping would cost the Exchequer £2billion, although these figures have been hotly disputed.