Isabella Fish & Mehreen Khan
Last autumn, when Jeremy Hunt said he would keep the 20 per cent levy in place, the Treasury estimated that the so-called tourist tax brings in about £2 billion a year to the exchequer.
But the decision to scrap tax-free shopping has had significant implications for the likes of Harrods, Selfridges, Liberty, and Fortnum & Mason all popular tourist hotspots.
A study from Cambridge University’s Centre for Economic and Business Research, commissioned by Global Blue, found that tax-free shopping in the UK increased spending from non-EU visitors by £21.80 each, resulting in a total increase of £265 million.
The UK’s tourism tax did little to deter a record number of American visitors to the UK last year, who made the most of the sliding value of the pound against the dollar.
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