MP joins call for return of ‘no-brainer’ UK tax-free shopping

Nickie Aiken condemns Chancellor Jeremy Hunt for failing to bring back the measure that would prove a major boost for hotels and retailers

A Burberry outlet in London. A Conservative MP says tax-free shopping would benefit the UK economy significantly by attracting more custom from GCC countries. Bloomberg
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Britain’s Chancellor Jeremy Hunt has been criticised by a fellow Conservative MP who was confounded by his failure to reintroduce tax-free shopping something she called a “no-brainer” to benefit the economy.

Nickie Aiken said she was “at a loss over why the Treasury does not accept the arguments to reintroduce tax-free shopping” for overseas visitors or indeed extend it to EU citizens.

“I believe introducing tax-free shopping would boost the economy for the retail, hospitality, hotels and corporate sectors but also manufacturing of luxury goods," she told MPs during the budget debate. "It is a no-brainer.”

In 2019, travellers from GCC states spent about £2 billion ($2.56 billion) on tax-free shopping in Europe with two thirds of it in Britain but the scheme was stopped by the then-chancellor Rishi Sunak three years ago.

Hopes of reintroducing the measure that allows international tourists to claim back VAT on their purchases in the UK, had led to a wave of optimism among retailers, restaurateurs and hoteliers who benefited from greater trade.

The British Chambers of Commerce, the Federation of Small Businesses and chief executives of luxury brands also pushed for the scheme’s reintroduction.

But in his speech last week, Mr Hunt ruled out bringing back the benefit, which Ms Aiken described as the “one measure missing from this budget which would benefit the economy”.

“Since the tax incentive was lifted we have seen international visitor spending fall in the UK and rise in European cities, including Paris, Milan and Madrid."

The MP for the Cities of London and Westminster, whose husband Alex Aiken works as a communications adviser for the UАЕ, highlighted an Oxford Economics report that predicted the return of tax-free shopping could attract “more than 1.6 million visitors to the UK, stimulating an extra £2.8 billion of spending overall”.

Conservative MP Geoffrey Clifton-Brown told The National last month the measure would attract a huge increase in tourists from the Gulf and make Britain “a much more attractive destination for GCC travellers”.

Updated: March 12, 2024, 8:16 PM