British VAT-Free Spending in EU Soars Fivefold Since 2021

Since the UK government abolished tax-free shopping for international visitors in 2021, British shoppers have increasingly turned to the EU to take advantage of VAT-free shopping, with spending by Britons in the EU rising more than fivefold to £742 million in 2024. This shift is driven by EU countries offering VAT refunds to British tourists, creating a competitive disadvantage for UK retailers and tourism. Business leaders from over 500 companies, including Burberry and Primark, are urging the UK government to reinstate the VAT-free shopping scheme, arguing it would boost the UK economy by billions, create tens of thousands of jobs, and increase tax revenue. France, particularly Paris, has become the leading destination for British VAT-free shopping. Critics warn the current policy is driving consumers abroad and harming UK retail and hospitality sectors, with concerns also raised about declining hospitality venues in 2025. Despite growing pressure and calls from industry groups and politicians like Labour's Rachel Reeves, the UK Treasury maintains there are no plans to reinstate the tax-free shopping scheme.