Decision not to axe tourist tax “frustrating”, says BID boss

7th March 2024 | Jack Oliver

The Chancellor’s decision not to reinstate tax-free shopping for tourists has been branded as “frustrating” by the chief executive of the Marble Arch London Business Improvement District (BID).

Kay Buxton – who has long been an advocate of the abolition of the so-called ‘tourist tax’ – accused Jeremy Hunt of ignoring calls from industry experts to remove the tax on spending for international visitors.

She said: “Independent research suggests that removing the tax on tourist spending would have led to an extra £3bn being spent on hotels, restaurants, retail, and visitor attractions by overseas visitors. The introduction of taxing tourist spending has damaged the international appeal of the UK for international visitors, so this is another missed opportunity by the Chancellor, which would have provided a much-welcomed boost for hospitality and the visitor economy.”

Earlier this year, it was reported that the Government could change its stance on tax-free shopping after the Office for Budget Responsibility announced it would be reassessing the decision to abandon the scheme.

VAT-free shopping for tourists was abolished in 2020 by the then-chancellor Rishi Sunak.

M&S’s chief executive recently called for the scheme to be reinstated. Stuart Machin said the tourist tax is costing the UK £10.7bn in GDP a year, with the impact felt beyond the retail sector.

He joined a number of figures from various sectors, including retail, which have been critical of the Government’s decision. Speaking at a parliamentary debate in September, Conservative MP and leader of the Scrap the Tourist Tax campaign Sir Geoffrey Clifton-Brown said that London’s retail and hospitality businesses have been abandoned by tourists in favour of mainland European destinations.

He added that the UK was missing out on a £1bn ‘Brexit boost’, as tourists opt for other destinations.


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