A coalition of business leaders from retail, hospitality, tourism and arts sectors have called on Chancellor Rachel Reeves to abolish the controversial 'tourist tax'.
In an open letter co-signed by bosses at Rocco Forte Hotels, British Airways, British Fashion Council, Fortnum & Mason and many more, business leaders highlighted how the 2021 decision to end tax-free shopping for international tourists has negatively impacted the UK’s competitiveness in the global tourism market.
They stated that the removal of the tax-free shopping scheme has reportedly pushed tourists to spend their money in other European cities like Paris, Milan, and Berlin, where such rebates are still in place.
The policy is tantamount to a "spectacular own goal" for the UK economy, said the letter, affecting not just luxury retail but also sectors like hospitality, transport, and tourism across the country.
It reads: “The entire tourist economy is affected, whether that be regional tourist centres or manufacturers down the supply chain, hotels and restaurants, taxis, galleries and museums, cafes… the list is endless. Every high street is seeing the impact.
“Analysis by the Centre for Economics and Business Research (Cebr) has concluded that not only would reintroducing a tax-free shopping scheme be affordable but that the cost of restoring the tax break would be far outweighed by the stimulus in tourist spending in other areas, including hospitality, restaurants, transport and the arts.”
Reintroducing the scheme could boost the UK’s GDP by £11.1 billion and provide a net fiscal gain of £2.5 billion, according to business leaders.
“We urge you to take decisive action, scrap the tourist tax and boost economic growth,” they stated.