We're working closely with Industry Associations in the UK - New West End Company, British Retail Consortium, Walpole and AIR - to mobilise a unified response to change this decision. We're calling on the government to reverse the decision to abolish UK VAT RES. We’re asking the government to work with the industry to implement a digital system to ensure UK tourism is competitive with other European markets.

Read Planet CEO, Patrick Waldron's open letter: UK to lose up to £10bn in tourist spend to EU as part of Brexit plans 

Read Planet CMO, Rory O'Neill's article: Save UK Retail - Mythbusting

Jobs across the UK in jeopardy

The UK's tourist VAT refund scheme benefits businesses across the whole of GB. UK retailers, hoteliers and airport chiefs have warned the chancellor that scrapping Tax Free shopping for international tourists has put 70,000 jobs in jeopardy.

There is strong regional use of VAT RES, with sharp growth in the validation and refunding of VAT RES claims at regional and secondary airports. The volumes of VAT RES forms processed for refunding at Gatwick increased from 233% from 2013-2019[1], for example.

"Crucially, this is not a London problem: The sales from international visitors play a huge part in securing employment for more than 160,000 people in all parts of the UK. Whilst London and other major shopping hubs in the UK are the shop window, the engine room is nationwide, with highly skilled manufacturing in Elgin and Speyside, Yorkshire and Lancashire, Staffordshire, Northamptonshire and Somerset amongst others"  - Walpole CEO Helen Brocklebank. 

"We pride ourselves in delivering a five star visitor experience in Edinburgh to a mainly international audience. The removal of the UK VAT retail export scheme will greatly impact sales of Scotch whisky and gift items to these visitors and further disadvantage a badly hit sector in these very challenging times.  Edinburgh relies heavily on international visitor spend and we ask that the UK government reverses its decision and helps keep the UK a competitive and attractive destination for international visitors" - Susan Morrison, Chief Executive, The Scotch Whisky Experience. 

"Tourists flock to Scotland for its rich heritage and cultural sites, contributing north of £90 million to the Edinburgh economy alone. In the midst of a pandemic, it is disheartening to learn of the UK government's decision to withdraw a key attraction for international shoppers – the UK VAT Retail Export Scheme. Hopefully, the decision can be looked at again to help protect 1,800 jobs that rely on tourism in Edinburgh alone" - Balwidar Singh Landa, Director, Scottish Experience, Elgin Cashmere

UK businesses face major disadvantage

HM Treasury's decision comes at a time when France is set to benefit from expanding their own Tax Free scheme. It's another blow to thousands of UK retailers, the leisure and hospitality sectors who will be badly impacted as returning tourists in 2021 go to France, Italy, Spain and other EU countries rather than the UK.

The Treasury have said that retailers will be able to offer VAT-free shopping to visitors who purchase items in store and have them sent direct to their overseas addresses. This simply doesn't make sense. Shipping goods to home addresses in key international source markets is a major issue that opens the door to lost or damaged goods and additional costs to retailers.

"We have built a reputation for increasing sales for over 1,500 retail partners across Europe. For more than ten years, our 22,000 Chinese Tour Guides have built invaluable bridges for high-spending Chinese tourists with the West. The news that the VAT Retail Export Scheme is being removed by the UK is extremely surprising. Across Europe, the shopping power of Chinese travellers is well known – shopping tourism itself is highly competitive with these wealthy families and individuals choosing their destinations and itineraries based on luxury brands' price and the products they sell. Removing Tax Free shopping from the UK will see more Chinese choosing to travel across the EU and spend their money where it will go further, instead of in the UK" - Maggie Lin, Country Manager, Eastsong Consulting

"It is really unbelievable that the government would think this is a beneficial decision for the economy. Foreign customers will no longer find us competitive, especially for those coming from countries to which we can not ship alcohol, (mainland China, Brazil, India to name just the three largest ones). We already have customers calling us and sharing their concerns. We have had a number of Chinese customers calling the day after the government broke the news as there were articles in China saying that the UK is no longer the place to go for shopping. There was obviously a lot of potential in terms of Tax Free shopping for EU citizens visiting the UK in the post Brexit era. This won't be happening in this context, which is a shame. It will obviously have an impact on the hospitality industry; we own a Michelin star restaurant (Hide) that partly relies on tourists. Overall I think it simply sends the wrong message; at a time when the government wants to promote the Global Britain, this says to the world that they will get less when they visit the UK. It simply does not make sense" - Julien Le Doaré, General Manager, Hedonism Wines

"For over ten years we have worked with leading UK retailers providing Tour Guide services for Chinese visitors. Our mission has been to work with them to help attract thousands upon thousands of high-spending visitors to the UK every year. We pride ourselves on bridging the gap between the East and the West. Our feedback suggests that 70% of our tour customers will choose to make their luxury purchases in other EU destinations such as France, Italy and Germany if the Tax Free Shopping scheme is stopped in the UK. We really hope the decision is re-considered before the UK economy is dealt another blow." Ming Ming Dong, Managing Director, Sinolink

Source

[1] Planet Intelligence data