After mounting pressure from UK retailers, Parliament is set to discuss the topic of reinstating tax-free shopping for international visitors at an upcoming debate on September 7.
It comes after calls from both retailers and MPs backing the ‘Scrap the Tourist Tax’ campaign continued to heighten, after it had initially been put to a stop towards the end of 2020.
According to a report commissioned by the Association of International Retail (AIR), the Treasury’s estimate of a two billion pound annual cost to reintroduce tax-free shopping in the UK was “inaccurate”.
Instead, AIR said that the Treasury was actually set to benefit by 350 million pounds each year, while the real direct cost of refunded VAT would be 590 million pounds.
The announcement of a debate is a partial victory for those that have insisted on a reevaluation of the tax, with MPs now required to discuss the issue over the course of 90-minutes and formally respond to the campaign led by Geoffrey Clifton-Brown MP.
In a statement, Dee Corsi, CEO of the New West End Company and chair of AIR, said: “We thank Geoffrey Clifton-Brown MP, who has led this campaign in Parliament and secured this debate. We now have the opportunity to highlight the impact of the ‘tourist tax’ on the British economy, and to discuss the benefits of restoring it.
“We cannot mitigate the damage already done by this ‘tourist tax’, but we can still avert long-term, damaging changes in shopper behaviour.”
Among the retailers that have expressed their concerns is that of Mulberry, which closed its Bond Street store in February citing the lack of VAT-free shopping as its central issue,
At the time, the brand said that a “decline in visitors has impacted footfall and sales”, something that was reflected in Mulberry’s FY22 results, where it reported a 1 percent fall in UK sales.