Global Blue UK’s Post

On Tuesday, a Treasury Minister said in Parliament that the cost of extending VAT refunds to EU shoppers was too great. And that is why the decision was taken to end all tax-free shopping. The Treasury estimated that the level of VAT refunded to EU shoppers in 2019 was £900m and thus is its deadweight cost. With VAT at 20%, this means the Treasury believes that EU shoppers spend £5.4bn on shopping alone. But VisitBritain states that the total amount spent on everything by EU shoppers (travel, accomodation, food, entertainment, shopping, etc) was £5.4bn. So if the Treasury is right, EU shoppers spent all their money just on shopping. So: - How did they get here? Did they walk and swim? - Where did they stay? Did they sleep on the streets? Wouldn't they still be wet from all that swimming - What did they eat? Maybe they bought sandwiches with them, but they would have got wet too. Or stolen while they slept on the streets. Or maybe they fasted. - Didn't all their shopping get stolen while they were sleeping outside? And would stores actually have let them in, what with them still being wet from all that swimming? And how did they get it back to Europe? I can't believe they would have had the strength to walk and swim back carrying all those goods. It's a mystery that not even the Treasury will respond to. Even though it insists that its forecasts are correct and cannot be challenged. Or maybe EU shoppers didn't spend all their money on shopping. Because all the real data on actual spending levels by EU shoppers, ignored by the Treasury, consistantly shows that the level of VAT they paid was just £50m And all the evidence shows that if the government had extended tax-free shopping to EU visitors it would have created a £10bn new tourist market and generated £1bn In additional VAT alone. Also this week, Selfridges announced a loss and 70 redundancies, which it blamed solely on the Government's decision to end tax-free shopping. At a time when the Government is looking for growth measures and trying to raise additional tax revenue, it is difficult to understand why the Treasury will not simply review its out of date and, some might say, ridiculous forecasts in light of all the new evidence. The OBR recently decided it needed to review its 2020 forecasts. Why is the treasury not prepared to do the same? Meanwhile, more losses, more redundancies and French, Spanish and Italian businesses rubbing their hands with glee, as wealthy international visitors stop spending in Britain and do their £3bn of shopping in mainland Europe instead. #touristtax #tourism #taxfreeshopping #retail #growth Howard Dawber Justine Simons OBE Laura Citron Patricia Yates Rachael Farrington Derrick Hardman Fraser Brown Dee Corsi Gordon Clark Sylvie Freund-Pickavance Roddy Smith Nick de Bois CBE Nick Brooks-Sykes Caroline Jennings Dame Caroline Dinenage DBE MP Steven Medway Pengju Fang Pete Bowyer FRSA

🗣️ Sir Paul Smith (Paul Smith) calls for VAT-free shopping for international visitors to be reinstated in the UK. He highlights the significant impact of the tourist tax on retail sectors in iconic shopping districts like Mayfair. His comments shed light on a critical issue: foreign shoppers are opting for cities like Milan over London, influenced by more favourable tax policies. It's crucial for policymakers, business leaders, and the community to engage in meaningful dialogue about the implementation of tourist taxes and their repercussions. As we've seen, such policies can deter international visitors, affecting not just luxury retailers but a wide array of businesses that thrive on tourist spending. 💳 For London to maintain its status as a premier shopping destination, we must reconsider our approach and look at competitive strategies employed by other European cities. This is not just about adjusting taxes, but also about enhancing the overall visitor experience and ensuring we remain attractive to international tourists. ✈️ At Revenir, we are committed to helping businesses navigate these changes effectively. By offering innovative VAT reclaim solutions, we support retailers in providing exceptional value to international visitors, making the UK an even more attractive shopping destination. Let’s keep this conversation going and work collaboratively to find solutions that support our local economy while remaining competitive on the global stage.  Read the article in full: https://lnkd.in/ekrZEuWQ #RetailImpact #TouristTax #LondonRetail #BusinessStrategy #CityAM #Revenir

We are glad to see the major concern HMT has for restoring tax-free shopping is brought into public discussion and here is why we believe the concern is wrong and blocking growth As Britain has left the EU, Britain would have to extend the scheme to EU residents which AIR believes would be a strong growth opportunity for the UK. Meanwhile, our European neighbours have been taking full advantage of Brexit, enjoying €780 million tax-free spending from Brits in 2023 and a 130% increase in bed nights in Paris for UK visitors. In 2020 the Treasury, however, considered that extending the scheme would give away around £900 million VAT as refunds to EU visitors based on their forecast model, which eventually led the Minister on the decision of abolishment. 2023 spending data suggests the total opposite: the existing spending on eligible goods from EU visitors is just as little as 10% of that from non-EU visitors therefore leading to around £50 million refunds, far less than the Treasury’s £900 million forecast — of course, without any incentive, why EU visitors would shop in the UK. If restoring and extending the scheme, Britain would not only win back big spenders from America, China, and the GCC countries but also become the only major European country that could offer the spending incentive to 448 million European residents. This would encourage European visitors to flock to our city centres and high streets, bringing in spending across the country and sectors, and generating tax revenues. Through our discussion on the data with the Treasury, we believe they have recognised the possibility of overestimating the costing. Using the methodology recognised by the OBR, AIR and our members will be working with our research partner to demonstrate the fiscal value of this new EU market and the restoration. The OECD has predicted that the UK will be the worst performing G7 economy next year as high interest rates and restrictive fiscal policy hampers medium to long-term economic growth At no time like now is more necessary to bring back tax-free shopping. We can’t afford to lose out more on growth opportunities. #taxfreeshopping #EUmarket #growth https://lnkd.in/dEkKTmhy

Great to see our Aviation Managing Director, Jim Niblock, featured as a commentator on DFNI’s latest article discussing the importance of VAT-free shopping and why it should be on the agenda of the new UK government. In the article, Jim emphasises the critical need for the UK to prioritise the reinstatement of VAT-free shopping, which not only benefits international travellers but also boosts the retail and tourism sectors. With his extensive experience and deep insights, Jim highlights how VAT-free shopping can drive economic growth and enhance the UK's global competitiveness. Read the full article here to learn more about the key arguments and recommendations put forward: https://lnkd.in/eW9nfvQa #VATFreeShopping #UKRetail #Tourism 

This week, Criterion Hospitality proudly supported the national campaign for the reinstatement of tax-free shopping for international visitors, with our Head of Hotels, Halima Aziz, appearing as a signatory in an open letter to the Chancellor, The Rt Hon Rachel Reeves 🛍️. This open letter, organised by leading figures including Sir Rocco Forte, has united over 300 business leaders from some of Britain’s most iconic retailers, hotels and cultural institutions, calling on the government to reverse the decision made in 2021 to abolish VAT refunds for overseas tourists 💷. As Halima commented: "The absence of tax-free shopping places the UK at a serious global disadvantage. The broader consequences of this decision are being overlooked – when tourists aren’t coming to shop, they’re not spending on theatre tickets, dining, or staying in hotels. While our West End hospitality portfolio continues to thrive, it's essential that the government steps up and recognises the wide-reaching impact on businesses of all sizes. We urge the government to act swiftly and reinstate this vital incentive." A study by the Centre for Research in Economics and Business (CREB) found that reinstating VAT refunds could boost the UK economy by £11.1bn a year, including an additional £2.5bn to government revenues 📈. It would also attract 2 million more international visitors to the UK annually, debunking claims that tourists are not being deterred by the current policy. The campaign has already gained significant momentum, with high-profile names such as Heathrow, John Lewis & Partners, Fortnum & Mason, Giorgio Armani and the Royal Ballet and Opera joining the call. The UK is now the only country in Europe without a tax-free shopping scheme, putting British businesses at a competitive disadvantage as tourists flock to cities like Paris, Milan, and Berlin 📉. 🔗 Please click here to read the Daily Mail’s coverage of the open letter: https://lnkd.in/ekjann5R #CriterionHospitality #CriterionCapital #Tourism #TaxFreeShopping #BusinessGrowth #UKEconomy #Hospitality #PiccadillyCircus #LeicesterSquare #WestEnd #London #VATFreeShopping

It certainly feels like momentum is gaining in calls to scrap the UK's "Tourist Tax" - the loss of VAT free shopping for overseas visitors. According to New West End Company footfall into London from international tourists is 3% above 2019 levels... but spending remains 12% below that pre-pandemic. By contrast, international spending in continental Europe is 36% higher in the first half of 2024 versus 2019, according to data from Global Blue. Removing the tourist tax could add £4.1bn to the economy, according to BusinessLDN. Reinstating tax-free shopping in the UK is a rare, golden opportunity to turbo-charge the country's growth potential. The question is, will a pro-growth but left-leaning new government risk the potentially negative optics of giving "a tax cut to rich foreigners" in a time of Austerity 2.0? https://lnkd.in/gDWGTRYy

Tourist Chiefs Keen To See Tax-Free Shopping Scheme Return For Overseas Tourists. As the summer holiday season gets into full swing, sizeable sections of the UK’s travel and tourism industry claim the sector is being left short-changed by a fiscal hangover from the previous government. Calls for the reintroduction of tax-free shopping for international visitors began almost as soon as the UK phased out the tourist perk in January 2021. The abolition of the VAT retail export scheme (RES) formed part of a wider recalibration of the UK’s tax regime for the cross-border movement of goods as the Brexit transition period ended. Tax-free schemes can either discount tax at the point of purchase (relying on the buyer producing a passport and short-term visa documentation, for example), or, as in the case of the UK RES scheme, they can allow consumers to claim back the tax paid after purchase. With the RES, this happened at the point of departure. One of the criticisms of the scheme was that it exacerbated queues at airports.  63 countries worldwide currently offer tax-free shopping to tourists, including all 27 EU members and the majority of OECD countries. In other words, by scrapping the RES, the UK has ceded ground in a lucrative tourist market to some of its closest rivals, both geographically and economically. Read more here... https://sowo.kr/2KXLBmah #Travel #Tourism #TaxFreeShopping #UKGovernment #Xeinadin

The findings from the Centre for Research in Economics and Business (CREB) highlight the substantial economic impact of reinstating tax-free shopping in the UK. According to the study, this policy change could contribute an additional £11.1bn to the economy each year, including £2.5bn in government revenues. Moreover, it is projected to attract an extra 2 million international visitors annually, challenging the notion that the current policy does not deter tourism. Reintroducing tax-free shopping would provide a significant boost to key sectors such as tourism, retail and hospitality, supporting job creation and stimulating economic growth 📈. #CriterionHospitality #CriterionCapital #Tourism #TaxFreeShopping #BusinessGrowth #UKEconomy #Hospitality #PiccadillyCircus #LeicesterSquare #WestEnd #London #VATFreeShopping

Insightful piece from Bloomberg shedding light on the concerning effects of eliminating tax-free shopping on the UK high street.   Despite RSM UK's Hotels Tracker revealing a promising rebound in London hotel occupancy surpassing pre-pandemic levels in December 2023, UK retail sales remained lacklustre in the final quarter of the year.   Meanwhile, our European counterparts are experiencing a notable uptick. This underscores the adverse impact of a misguided policy, hampering consumer spending and economic growth in the UK.   Read the full piece 👇   #TaxFreeShopping #Retail #EconomicPolicy

We look at how abolishing tax-free shopping for international tourists in 2020 has had a significant impact on UK retailing. #taxfree #VAT #shopping #tourism https://bit.ly/4aIczrM