Labor expresses disapproval as Watches of Switzerland joins the ranks of companies advocating for the abolition of the tourist levy tax
The UK government has been urged to reconsider the abolition of VAT-free shopping for foreign visitors, with more than 500 business leaders backing a campaign led by The Mail. This measure is seen as a potential solution to counteract the shift in spending power from the UK to EU countries, where VAT-free shopping remains available.
Since the UK axed the VAT-free shopping scheme at the start of 2021, British shoppers have increasingly been shopping in the EU, with spending reaching approximately £742 million in 2024, up from £147 million in 2021. This trend indicates a significant loss of retail revenue and tourism spending domestically.
The Association of International Retail (AIR) suggests that reintroducing VAT-free shopping in the UK could have substantial economic benefits. According to their analysis, it could boost the economy by over £3.65 billion annually, create around 73,000 new jobs, enhance regional economies by £1.8 billion per year, and increase VAT revenue by over £500 million annually.
The VAT-free shopping scheme is particularly attractive for high-end and luxury purchases, which are significant drivers of tax-free spend. EU countries mandate retailers to allow VAT refunds of at least 15%, often around 20%, making luxury shopping notably cheaper for visitors compared to the UK, currently the only major global shopping destination without this incentive.
Industry groups such as AIR and UKTRF are actively lobbying the UK government to reinstate these VAT-free benefits to make UK retail competitive again and counteract the observed “shopping-led tourism” exodus to EU destinations.
Notable supporters of the campaign include Britain's largest Breitling seller, Watches of Switzerland, who consider restoring VAT-free shopping a 'quick win' to stimulate the economy. A spokesman for Watches of Switzerland stated that restoring VAT-free shopping would be a 'no-brainer' for economic growth.
In the world of investing, platforms such as AJ Bell, Hargreaves Lansdown, interactive investor, InvestEngine, and Trading 212 are offering options for those looking to invest in the UK economy. Each platform offers a "Learn More" option, allowing potential investors to explore their offerings further.
However, it's important to note that affiliate links may be present for some of these platforms, and This is Money may earn a commission if a product is taken out. The presentation of these platforms does not affect the editorial independence of This is Money.
As the debate continues, Hollywood actress Charlize Theron's recent advertising campaign for Breitling adds timely weight to the argument for VAT-free shopping. Meanwhile, Watches of Switzerland has criticized Labour for refusing to abolish the tourist tax, further fuelling the call for change.
In conclusion, restoring VAT-free shopping for foreign visitors in the UK is seen as a vital step to reclaim lost spending power, invigorate the retail sector, support jobs, and generate additional tax revenue, ultimately boosting the broader UK economy.
Read also:
- Developing a Sales Strategy: Methods, Sample Plans, and Templates for Sales Plans
- Events that transpired on the night of August 13, 2025.
- Manchester-based entrepreneur Amman Ahmed propelled an unusual venture to an 8-digit empire, without external financing. This is the story of how he crafted a groundbreaking genre in the world of animal-oriented media, one growl and rhythm at a time.
- Cooking Quantity of Beef Corresponds to Citizens' Salaries - Analysts Disclose
