UK Tempts Tourists With Tax-Free Shopping

Retailers in the U.K. can roll out the tax-free welcome mat to overseas visitors now that the region has re-instituted the tourist perk in hopes it will help lure people to the area to vacation and shop.

Recently appointed Chancellor of the Exchequer Kwasi Kwarteng told Parliament during his Growth Plan 2022 speech on Friday (Sept. 23) that he was bringing back value-added tax (VAT)-free shopping for overseas visitors. VAT-free shopping for tourists was eliminated by former Chancellor Rishi Sunak last year.

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“Britain welcomes millions of tourists every year, and I want our high streets and airports, our ports and our shopping centres, to feel the economic benefit. So we have decided to introduce VAT-free shopping for overseas visitors,” Kwarteng said.

“We will replace the old paper-based system with a modern, digital one. And this will be in place as soon as possible. This is a priority for our great British retailers — so it is our priority, too,” Kwarteng added.

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Tax-free shopping is anticipated to be the right vehicle to help fuel tourism and hospitality across the country and direct more spending toward retail, with regional airports also benefiting.

“The Chancellor’s decision to reintroduce tax-free shopping for overseas visitors is a great victory for London’s International Centres. Now the West End can compete on a level playing field with Paris, Milan and Madrid as one of the world’s top shopping and leisure destinations,” Dee Corsi, interim CEO at business group New West End Company said in a LinkedIn post on Friday (Sept. 23).

“In 2019 international visitors contributed over £28 billion to the UK economy. The Government’s announcement is great news and we are confident that we can exceed this figure in the years to come,” Corsi added.