Retail bosses hail return of tax-free shopping for international tourists

Retail bosses have welcomed plans to reintroduce tax-free shopping in the UK for global tourists.

The Chancellor said the Government will consult on a new tax-free shipping scheme for Great Britain and modernise the existing scheme in Northern Ireland.

The £2 billion tax reduction forms part of £45 billion tax-cutting plans unveiled by Kwasi Kwarteng in Parliament on Friday.

“This is a priority for our great British retailers – so it is our priority, too,” the new Chancellor said.

The scheme will allow tourists to be refunded VAT on goods bought at UK airports and high street shops when they take it back home.

Retailers and other businesses benefited from the scheme until January 2021, when former chancellor Rishi Sunak halted the policy after Brexit.

The Government said it will now gather views on how to approach the scheme ahead of a likely relaunch in 2024/25.

UK Travel Retail Forum chairman Nigel Keal said: “This is a fantastic announcement by a government that has been clear from the start of its intention to put aside Treasury orthodoxy and find new ways to generate growth for the UK economy and industries.

“The travel retail industry welcomes today’s news.

“When the previous government removed tax-free shopping as a part of Brexit, the effects on a travel sector already struggling with the Covid pandemic were substantial.

“The restoration of tax-free shopping will be a boost to the recovery of our industry, and will put UK travel retailers on a level footing with their competitors around the world.”

Helen Dickinson, chief executive of the British Retail Consortium, added: “We welcome the reintroduction of tax-free shopping for tourists, which will boost sales and bring the UK back in line with other European nations.”

However, she was among industry leaders disappointed that the Government did not cut VAT or address bumper business rates for high street firms.