Act now to tell the Government how your business has been impacted by the ending of tax-free shopping

  • The Government is asking for evidence of the impact of ending tax-free shopping for international visitors the UK.

  • It’s really important that retail, hospitality, tourism, and cultural businesses of all sizes — and the organisations that represent them — write to the Government with their experiences.

  • The more evidence we give, the greater the chance of persuading the Government to restore tax-free shopping.

  1. Write your response – see our guidance here 
  2. Email it to the Government – see contact details here
  3. Share with AIR – see why and how here

JUST FOLLOW THESE THREE STEPS

 

Why your evidence is important?

When the Government announced the removal of tax-free shopping in late 2020, it forecast that the decision would “have a limited behavioural effect on decisions to visit, or spend, in the UK.”

Businesses maintained that making the UK the only major European country not to offer tax-free shopping to international visitors would result in many of them choosing other European countries to do their shopping.

We predicted that highly mobile, prices sensitive travellers are likely to spend less time in the UK and less money in our shops and on other goods and services.

With international travel starting to recover in 2022 we now have real evidence of the impact of adding 20% to the cost of goods sold in the UK.

We now need to submit to the Government as much evidence as possible and from as many sources as possible to show the real effect on British businesses and

What the evidence shows

Before it was ended, tax-free shopping was only available for non-EU visitors.The pent-up demand following the COVID-19 pandemic saw this element recover strongly with record levels of spending in Europe, particularly by visitors from the United States. But the UK performed significantly worse than our EU competitors, such as France, Spain and Italy.

1. Visitor numbers – UK performing worse than France and Spain[1]

2022 international visitor numbers compared with 2019.

  • UK: -25%
  • France: -15%
  • Spain: -16%
2. Visitor Spend – UK performing worse than France and Spain[2]
Image
3. Chinese Visitors – UK now least favourite major EU destination

In 2019 Britain was close to France as the most popular European destination. With Chinese people only just starting to travel again, a survey of past travellers from China to the EU[3] showed –

  • 92% of 2019 travellers were planning a trip to Europe in 2023
  • Following the ending of tax-free shopping, the UK is now the least popular major European destination
  • France 75%, Italy 68%, Germany 64%, Spain 59%, UK 43%
4. It's not just shops - UK's hotels are suffering too. 

2022 spending in hotels compared with 2019[4]

  • UK 76%[5]
  • France 93%
  • Italy 100%
  • Spain 109%


Reference

[1] United Nations World Tourism Organisation. Data for Italy not yet available

[2] Global Blue

[3] Global Blue

[4] Planet Payments

[5] Note – also affected by level of the return to offices post-COVID-19