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Letter to Chancellor

Retailers lifted by ministers plea on tax-free shopping

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Kate Forbes, pictured, and Fiona Hyslop have urged change (pic: Terry Murden)

Scottish retailers have received more political support to have a ban on tax free shopping for tourists overturned.

Finance Secretary Kate Forbes and Economy Secretary Fiona Hylsop have written to Chancellor Rishi Sunak asking him to reconsider the decision.

The industry estimates that thousands of jobs and hundreds of millions of pounds in sales could be lost in Scotland by abolishing the duty-free perk – officially the VAT Retail Export Scheme – as well as tax-free airside sales from 1 January.

The Scottish ministers say: “Since your minister’s announcement in September, we have received representations from many stakeholders across Scotland, each of whom has expressed surprise at the lack of engagement from the UK Government, and shared extensive concerns regarding the detrimental consequences for the sectors they represent.

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“We find it difficult to align the decision to abolish duty-free shopping with your proposals for the introduction of freeports across the UK. Your freeport model incorporates a number of tax incentives intended to attract inward investment to the UK.

“This seems to us to be a counter-intuitive and disjointed approach to supporting business, investment and jobs.”

The Scottish Retail Consortium wrote to UK and Scottish Ministers in September and subsequently spoke with UK and Scottish Ministers directly on the issue.

Earlier this month it co-ordinated a joint letter to UK Ministers from six trade groups and encouraged MSPs from across the political spectrum to support a parliamentary motion urging a rethink.

David Lonsdale, director of the SRC, said: “This intervention from Scottish Ministers in support of the retention of tax free shopping is most welcome.

“A growing chorus of voices is expressing serious doubts about the wisdom of scrapping tax free shopping for international tourists to Scotland and the rest of the UK.

“The UK Government needs to reconsider its retrograde decision which risks hampering the economic recovery.”



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