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UK: VAT-free shopping scheme will not be reinstated

Oct 19, 2022 United Kingdom

The new British Finance Minister Jeremy Hunt announced that the Government no longer plans to reintroduce VAT-free shopping for overseas visitors. Luxury and retail sectors are against it

"We will reverse almost all the tax measures" outlined last month by the previous Chancellor Kwasi Kwarteng, including the "new VAT-free shopping scheme for non-UK visitors", advanced the recently appointed Finance Minister, Jeremy Hunter. He succeeds Kwarteng, who stepped down after only 38 days in the job due to the instability that arose in the markets following the announcement of several tax cuts that caused the pound to fall to a record low against the dollar.

The retail and luxury sectors, which had welcomed the reintroduction of this scheme, have already expressed their discontentment. "We are disappointed that the government has decided not to proceed with its policy to return tax-free shopping, a policy which will quickly deliver growth", commented Helen Brocklebank, chief executive officer at Walpole, which represents the UK luxury industry.

Paul Barnes, the chief executive of the Association of International Retail, said that this reversal will "come as a hammer blow to UK tourism and the British high street". "This short-sighted move is based on inaccurate and incomplete projections, and risks putting a brake on the return of international visitors who are vital drivers of economic growth throughout the UK".

Image Credits: Jonny Gios on Unsplash

United Kingdom Economy Luxury Retail