Proactive Investors - Retail bosses in the UK are kicking out at the government over its decision to not bring back VAT-free shopping for tourists, warning it will have a wider effect on the economy.
Pubs, restaurants and hotels are also being affected by the ending of the scheme, but the boss of the O2 Arena’s outlet shopping centre believes this was a consequence the Treasury failed to consider.
Janine Constantin-Russell said: “The government isn’t listening at all. It’s looking at the outgoings instead of looking at how much a tourist would spend across the wider hospitality sector. Every destination and attraction is affected, not just the luxury brands.
“We’re having to fight even harder to ensure that tourists visit the UK as they know they can get discounts in other countries such as France and Italy.”
Back in 2021, Sunak cancelled the tax-free shopping scheme, which enticed foreign shoppers to the UK by refunding the 20% VAT paid on purchases.
Jeremy Hunt subsequently launched a review into the scheme amid pressure from hundreds of business owners to reverse the decision.
Britain's Office for Budget Responsibility (OBR) conducted the probe on behalf of the chancellor and concluded that the reasoning for scrapping the scheme years before “still appears reasonable” today.
Therefore, Hunt made no amendments to Sunak’s initial plans, having been warned the cost of covering VAT for visitors could reach £2 billion.
Constantin-Russell added: “We were really excited that we might get listened to and then, overnight, were told it was too expensive to reinstate. The government seems to just keep pushing that bit of paper from office to office.”