The British government has announced that it will again allow tourists to shop without VAT. That option was removed after Brexit to boost trade. Removing VAT for tourists “will boost department stores and create jobs in retail and tourism,” the so-called growth plan proposed by British Chancellor of the Exchequer Kwasi Kwarteng on Friday.
The new scheme is aimed at non-UK visitors and provides for a VAT refund for goods bought in high streets, airports and elsewhere in the country, provided they leave the UK in their personal luggage, the British government clarified. Former Finance Minister Rishi Sunak scrapped that system when the UK left the EU in January 2021, much to the dismay of the retail and tourism sectors.
The British government clarified on Friday that it would launch a public consultation on how the scheme should be implemented and said it wants to start as soon as possible. According to documents released after the presentation of the so-called mini-budget by Minister Kwarteng in the British Parliament, the scheme could be introduced in 2024. Government revenues would fall by £1.3 billion in the first year.
Especially in tourist hotspots like London, retailers have long advocated the return of the scheme. According to the City of London Corporation, which represents the capital’s business district, the VAT refund will “provide a much-needed boost to the retail, hotel and other sectors that rely on tourism for their revenues”. The British chambers of commerce also welcome the return of the measure.
Also read:
PORTRAIT. Liz Truss, the ‘Iron Lady’ who becomes British Prime Minister: “If I have to, I’ll push the nuclear button” (+)
Who is Liz Truss, the new British Prime Minister?
Free unlimited access to Showbytes? Which can!
Log in or create an account and don’t miss out on any of the stars.