AIR has been at the centre of the campaign to reverse the Government’s decision to end the VAT RES (tax free shopping) and ESC (airside tax-free shopping).
From Jan 1st 2021 Britain became the only European country not to offer tax-free shopping to non-EU visitors. AIR believes that this is a mistake because:
- It undermines Britain’s standing as a world destination as we leave the EU.
- It puts the UK at a competitive disadvantage with our European neighbours.
- It makes Britain a less attractive destination, particularly for high spending visitors.
- It will result in the loss of around £1.5 billion of retail sales annually as well as sales of other goods and services as visitors spend less time and less money in the UK.
- It stifles future growth, particularly from high spending Chinese visitors.
- It hits all parts of the country from Glasgow to Edinburgh, Manchester to Birmingham, damaging the tourism, airport, hospitality and retail sectors.
- It puts at risk over 20,000 retail and 5,000 airport jobs over and above COVID-19 redundancies.
- It puts 15,000 manufacturing jobs at risk throughout the UK, particularly damaging British heritage brands.
- The £300 million VAT that the Treasury forecasts it will raise will be wiped out by the VAT lost on sales of other VAT-able goods and services as visitor numbers and spending fall.
In the short term AIR is supporting the call of the Chairman of the Treasury Select Committee for a comprehensive, independent assessment of the full impact of ending tax-free shopping.
In the longer term AIR and our partners are planning a new campaign for 2021-22.
You can see AIR’s latest update here.
Visitors from some of the most important markets for international retail have to apply for a visa to visit the UK. Although the application system is relatively easy, leading to over 90% of applicants obtaining a visitor visa in key markets like the Gulf States, and is continually being improved by the Government, we need to be constantly seeking enhancements which lower the visa application barrier while retaining Britain’s border security.
As the UK is not part of the Schengen area, visitors wanting to make a multi-country tour of Europe need to apply for two visas if they wish to visit mainland Europe and the UK. Having to apply twice for two separate visas stops many individuals and tour operators from adding the UK to their multi-country tours.
AIR has incorporated the UK China Visa Alliance (UKCVA) which has worked for six years with the Government to increase Chinese visitor numbers. The UKCVA has helped to increase Chinese tourism to the UK by over 179% in five years through changes to UK visa policy and practices. That is compared to the 129% growth in the Schengen area.
UK visitor visas issued in China 2018
UK visitor visas issued in China 2012
The law governing Sunday trading in the UK places some retail centres at a disadvantage compared to their international counterparts. Stores in England and Wales can open for no more than six consecutive hours between 10 am and 6pm on Sundays.
Most of the UK’s international retail competitors – such as New York, Milan, Dubai, Beijing, Tokyo – have no Sunday trading restrictions. In Scotland there are no restrictions on Sunday trading hours.
AIR will work to ensure that London’s two International Centres - Knightsbridge and the West End - are added to the existing list of exemptions from the Sunday Trading Act 1994. This significant but achievable legislative change would be worth an estimated £260 million in annual net additional sales in the West End alone and create over 2,000 new FTE jobs.
This quarter of a billion pound annual sales boost in the London International Centres will directly help high streets throughout the UK, particularly those struggling in the midlands and north of England. By generating significant additional revenue in these stores, national retail chains will be under less pressure to cut costs, stores and jobs in poorly performing areas in other parts of the UK.
Over time, AIR will work to extend exemptions to those areas with significant international retail demand, ensuring the UK remains competitive in retail tourism.