Jobs at risk after tax-free shopping axed

2023-07-15

Thousands of jobs at risk across Britain as hotels and businesses reveal slump in overseas visitors after tax-free shopping scrapped by the Government

Firms have said tourism has slumped since tax-free shopping was scrapped

Hotels and businesses across the UK say they have suffered a slump in overseas tourism after a tax-free shopping perk was scrapped by the Government – putting thousands of jobs at risk.

Hundreds of firms in visitor hotspots such as Liverpool, Bath and Oxford are missing out after the VAT-free shopping for international visitors was axed.

More than 320 prominent businesses have now backed the Mail’s Stop The Tourist Tax campaign, arguing it is stifling the economy.

But, despite Ministers’ insistence that it primarily affects high-end shops in the capital, businesses all over the country say it is not just luxury retailers feeling a jolt by the decision taken by the then Chancellor Rishi Sunak in 2021.

Hoteliers throughout the UK say they are missing out on bookings as tourists favour trips to European nations with VAT-free shopping.

Hundreds of firms in visitor hotspots such as Liverpool, Bath and Oxford are missing out after the VAT-free shopping for international visitors was axed. Pictured: Bicester Village

Paul Bayliss, general manager of The Ropewalks Hotel in Liverpool, said: ‘My experience is that we now see a huge decline in bookings. It’s shortsighted to think collecting a tax placed on retail goods outweighs the loss in revenue guests used to spend while in the UK.’

James McComas, general manager of Eastwell Manor, Champneys Hotel and Spa in Ashford, Kent, near tourist hotspot Canterbury, said: ‘With discretionary spending being hit hard by inflation and interest rate rises, our reliance on the international market will be stronger than at any point since pre-Covid.’

Ian Edwards, chief executive of The Celtic Collection group of hotels across Wales, added: ‘International tourists who come here to shop would travel all over the UK, spending money in hotels like ours, as well as in local shops, restaurants, galleries, cafes, theatres, taxis and public transport. The visitor economy relies on this spend.’

Last week, The Mail on Sunday revealed that Treasury officials have requested new data on the economic impact of the tourist tax.

Chancellor Jeremy Hunt previously insisted that a U-turn would be ‘too expensive’, saying that it would cost £2 billion a year.

But a study by experts from analysts Oxford Economics said reinstating tax-free shopping would bring a £4.1 billion boost to Britain’s economy and support 78,000 jobs.

Hoteliers throughout the UK say they are missing out on bookings as tourists favour trips to European nations with VAT-free shopping. Pictured: Eastwell Manor

Watches of Switzerland boss Brian Duffy said that the negative repercussions of the tax are felt beyond London, naming Edinburgh, Manchester and York as destinations that stand to lose out. He added: ‘London is obviously important, but there is tourism throughout the country, it’s a hugely important part of the economy.’

Hayley Beer-Gamage, chief executive of tourist board Experience Oxfordshire, said the tax was ‘a real barrier’ for Chinese and American travellers choosing to book extended stays in the UK.

‘A prime example is [the discount retail park] Bicester Village. We have markets including China, the UAE and India who would come to the UK just to go there.

‘Then there is a knock-on support with secondary spend in hotels, pubs and restaurants. It absolutely isn’t just a London-centric issue.’

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