Scrapping tourist VAT would be ‘quick win’ for Chancellor Jeremy Hunt as companies say tourists are not spending as much money in the capital

• BusinessLDN is among business groups backing a campaign to scrap tourist tax

Restoring tax-free shopping would be a ‘quick win’ for the economy, the Chancellor was told last night.

BusinessLDN, which represents a number of firms in the capital including Heathrow Airport and the Grosvenor property group, is among the prominent business groups backing a campaign to scrap the hated tourist tax.

Firms have said tourists are not spending as much money in the capital due to Rishi Sunak’s decision to remove a VAT-free shopping scheme for holidaymakers in 2021.

More than 400 businesses have backed The Mail’s Scrap the Tourist Tax campaign including household names such as Marks & Spencer

It comes as fresh figures showed that the UK economy flatlined over the summer.

Rocco Forte, founder of the Rocco Forte Collection, center, during a protest by business leaders against the Tourist Tax in London, on November 1, 2023

Muniya Barua, deputy chief executive at BusinessLDN called on Jeremy Hunt to ‘help Britain break out of its low-growth trap.’

‘Restoring VAT-free shopping for international visitors would be a quick win with rapid payback for the Exchequer by boosting tourist numbers and spending in the capital,’ Barua added.

MPs are set to discuss the impact of scrapping tax-free shopping on Tuesday 14 November.

Tourism industry bosses will answer the Culture, Media and Sport Committee’s questions about how the move has influenced visitor numbers and spending.

Dame Caroline Dinenage MP, chair of the committee, said: ‘We heard last year that Government policies have been discouraging visitors and making them less likely to spend, with the decision to remove tax-free shopping for tourists symptomatic of an approach that is making the post-pandemic recovery harder rather than easier.’

Muniya Barua, deputy chief executive at BusinessLDN called on Jeremy Hunt to ‘help Britain break out of its low-growth trap’

‘Our session will be a chance to explore how such policies are affecting retailers and businesses twelve months on.’

It comes after business secretary Kemi Badenoch appeared to break ranks with the Government over the controversial levy.

The minister said companies had raised the issue of bringing back VAT-free shopping with her ‘a lot’ and that she was ‘very keen for them to know we understand the arguments that they’re making’.

The Government has said it will not row back on the tax.

Economists at the Centre for Economics and Business Research estimate the tax is costing the UK £10.7billion in lost GDP and putting off two million travellers from visiting each year.

A Treasury spokesman said VAT-free shopping ‘does not directly benefit Brits’.

Source: Read Full Article