Chancellor under fire

Sunak attacked for axeing tax-free benefit for visitors

Multrees Walk, shop, retail, Edinburgh

Shops fear they will lose extra trade from visitors (pic: Terry Murden)

The Chancellor Rishi Sunak is facing a Commons backlash today for going ahead with his plan to deny tax-free shopping to overseas visitors to the UK.

Currently they can claim a VAT refund on items bought in the UK and tax-free sales at UK airports – at the same time earning millions for British retailers and safeguarding jobs.

The Treasury has confirmed that it intends to withdraw the VAT Retail Export Scheme (RES) and airside Extra-Statutory Concession (ESC) to non-EU visitors from 1 January.

Retailers, MPs and aviation leaders have criticised the decision which they say will hand billions of pounds of sales to Britain’s European rivals. France and Ireland have already lowered their tax-free thresholds to capitalise on the decision.

London Heathrow airport is taking the issue to the High Court as part of a judicial review. John Holland-Kaye, the chief executive of Heathrow, said: “Brexit was meant to be about taking back control to make the UK more competitive. The tourist tax will do just the opposite. The French can’t believe their luck.”

Les Echos – a French financial paper – asked bluntly why the UK government was “shooting itself in the foot in terms of competitiveness, at the very moment when France is preparing to extend its tax refund?”  

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