Nearly 40 million people visit the United Kingdom each year, and spending by these visitors has been growing 7% year-on-year. International shoppers spend nearly four times what domestic shoppers spend, with some retailers seeing up to 60% of their sales from non-domestic shoppers. The annual spend by non-EU tourists in the UK on tax free goods alone is over £10bn and, in addition, they spend on hotels, restaurants and leisure attractions.
The fifth European Union directive gave non-EU visitors to the region the right to buy goods “Tax Free”. While the UK government decides to remove it, many other nations are introducing it to increase competitiveness and attract tourists.
The decision to withdraw the tourist VAT refund scheme serves as a disincentive for international shoppers to come to the UK and spend. As a result, it threatens the jobs and livelihoods of hundreds of thousands of families across the UK, already impacted by the devastation wrought by the COVID-19 crisis.