by If you walk one of the shopping streets in London today, you will find that something is missing – not the designer shops or beautiful window exhibitions, but the international tourists. The visitors who once spent freely in our shops remained in our hotels, dishes in our restaurants and no longer enriched the entire economy into the numbers that we used to see. Many are now completely by London for Paris, Milan or Madrid. Those who come are less pronounced than before. Why? Because British tax -free shopping has been scrapped.
This decision of the last government has recently been one of the most self -destructive. Since the abolition of VAT taxes for tourists in 2021, Great Britain has been the only large country in Europe that does not offer international visitors. And let me tell you that the consequences are strong.
One of them is that fewer people come to our banks. New figures show that the number of visitors in the UK have almost returned to pre-pandemic levels, but the growth that our EU rivals have have not seen. According to new figures from the Association of International Retail (AIR), tourist expenditure in 2019 has dropped eight percent. In France and Spain, expenses have now increased – by ten percent and six percent. The difference? They still offer VAT Free purchases. But we haven’t been doing it since 2021. Despite the clear consequences.
To be clear, it’s not just about some luxury dealers in the West End. It is about the entire visitor industry throughout the UK. Purchasing is a quarter of all editions of international tourists. For each pound issued in retail, visitors spend another £ 4 for hospitality, transport, culture and services. This is money in the coffers of the restaurants in Edinburgh, taxi company in Manchester, the theater in London and family -run hotels in the Lake District.
After the decision to scrap the system, the surplus that foreign visitors paid for their purchase was referred to as a “tourist tax” – and rightly so. There have been high -quality visitors and gave our European rivals a competitive advantage. British tourists are now increasingly making their purchases on the continent and are calling for VAT in Milan and leaving British business behind. Visitors from the USA, China, the Middle East and now post-Brexit-die 450 million citizens of the EU are actively stimulated to go somewhere except here.
Of course, we see the effects in our hotel group, in which tourists who were once loaded with packages, we see British trips to add a stopover in Europe in Europe, as they know that they can get back sales tax. This is amazing – but it’s reversible.
Great Britain now has the chance to be the only country in Europe that offers the residents of the EU tax -free purchases. This is a Brexit advantage that is hidden in sight. If we reintroduce a modern, digital tax -free purchase program, we can convert this lost opportunity to an increase of £ 3.7 billion a year for Great Britain.
A new submission to the ministers by air makes it clear. The re-hiring of VAT Free purchases could create at least 73,000 jobs, mainly outside of London, where half of the EU tourist spending takes place. Regional airports, local main roads and national visitor attractions would all benefit from it.
This guideline has the support of an United Business Voice. Heathrow, John Lewis, Primark, Mulberry, Bicester Village, the British Retail Consortium, the British Fashion Council, Historical Royal Palaces, Shakespeare’s Globe and dozens of more demands.
Purpose -free purchases are not a tax loss, but an income driver
This would not cost Great Britain in a time of extended public finances. The evidence is clear: added value -free purchases are not a tax loss, but an income driver. The tax you return for retail is paid back a multiple in the expenditure for goods and services in which VAT still applies. Even if there are discounts, many claims with low value are not pursued, which means that the exchangers still keep a large part of the VAT and at the same time benefit from wider economic activity.
This is not just a London problem. Many of our visitors come to overseas to visit family, visit our regions or explore smaller cities. A flourishing visitor management supports restaurants in Glasgow, boutiques in Bath and Hotels in Newcastle as well as the center of London.
Great Britain now has the unique opportunity to become global capital for shopping – a status that we once kept proud. Now, with Great Britain outside the EU, we can become the only country in Europe that offers EU tourists tax-free purchases.
The government talks about the work of Brexit. Here is an opportunity to do exactly that. It is a simple change that only requires the willingness to admit that a mistake has been made and to express it properly.
The Department of Culture, Media and Sport is currently creating a new growth plan for visitor management. If the ministers are serious to increase tourism, support jobs and revive our main roads, the reinforcing of the tax -free purchase should be at the top of this plan.
It is not often the case that a government presents an economy lever that can provide new expenses, tens of thousands of new jobs and stronger regional growth without increasing taxes or increasing long -term subsidies. However, this is exactly the opportunity that is now sitting in front of the ministers and introduces the proposal to reintroduce the tax -free purchase for international visitors.
It would make quick, measurable profits for Great Britain. It is fiskally solid, economically stimulative, regionally integrative and politically feasible. In short: it’s a child’s play.
Now the time is to act. Let’s stop putting tourists into the arms of our rivals and moving them back to Great Britain. Let us scrap the tourist tax, buy VAT and make the British shopping destination in the world again.
Sir Rocco Forte is the chairman of Rocco Forte Hotels
