UK Business Leaders Urge Government to Restore VAT-Free Shopping for International Tourists

UK business leaders and retailers, including Burberry CEO Joshua Schulman, are urging the government to reinstate VAT-free shopping for international tourists, arguing it would boost the economy and help the UK reclaim its status as Europe's premier luxury shopping destination. The VAT refund scheme, scrapped in 2021 following Brexit, previously allowed overseas shoppers to reclaim 20% VAT on purchases, a benefit still offered by competitors like France and Italy. The Association of International Retail estimates that restoring tax-free shopping could generate an additional £3.7 billion in spending and create over 73,000 jobs, benefiting not only London but regional economies and various sectors such as hotels, restaurants, and cultural attractions. Despite strong industry support and evidence that the absence of VAT rebates has driven visitors to rival countries, the Treasury has resisted, citing concerns over a potential £2 billion cost to the exchequer by 2025-26. Retailers highlight significant revenue losses, with London's West End alone missing out on hundreds of millions in visitor spending. While the government is preparing a new Visitor Economy Growth Plan, officials maintain there are currently no plans to reinstate the VAT-free shopping scheme.