London’s Evening Standard published an open letter to Rishi Sunak, calling for a rethink on the Treasury’s post-Brexit VAT plan.
Jim Armitage, Evening Standard Business Editor has penned an open letter to the Chancellor, where he tells him: Sorry, Rishi, but your sums just don’t add up.
Armitage explains that “in four weeks, new laws will end the decades-old duty free regime for travellers from outside the EU. The result will be to make shopping here 20 per cent more expensive for them”. Ministers have made the case that ending the tax-free shopping for tourists will close a loophole that is currently costing the Treasury £524 million per year, and that it is mainly the wealthy that benefit from the perk.
What does this mean for business?
In the article, it is explained that the loss of those big-spending tourists risks tens of thousands of jobs from across the UK. Businesses from shops to hotels will be negatively impacted by this VAT decision. “Thousands of skilled craftsmen making luxury goods around the UK will be hit. Mulberry makes its handbags in Somerset. Burberry and Barbour make coats in Yorkshire and Tyne and Wear. Church’s makes its shoes in Northampton. These are the very items tourists love to buy here.”
Global Blue, which helps shops and shoppers take advantage of tax-free shopping, estimates that the real cost of losing tourist spending for hotels, restaurants and retail will be around £3.4 billion and the total loss to the UK economy could be £6 billion.
What can be done?Â
Sign the “Keep tax-free sales at airports and the VAT Retail Export Scheme” Petition here.
Read the full Evening Standard Open Letter here.Â
