Britain's 'tourist tax' brings tourists to Paris, Milan and Madrid for duty-free shopping | Travel


Thousands of tourists who once came to the UK for duty-free shopping are now visiting stores in Paris, Milan and Madrid after Britain scrapped the preferential treatment following Brexit.

Britain's 'tourist tax' draws tourists to Paris, Milan and Madrid for duty-free shopping (AP File Photo/Luca Bruno)

In 2019, 162,000 tourists from outside the European Union claimed a VAT refund in the UK alone, according to new analysis. A fifth of them are currently claiming rebates in other parts of the EU where tax breaks still apply.

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The UK will end tax incentives in 2021, resisting strong lobbying from retailers and other companies linked to the tourism sector.

According to Swiss-based tax rebate provider Global Blue, the 34,000 tourists who relocated their duty-free shopping base from the UK also spent an average of €2,900 per person in 2019. In 2023, it will increase to 3,800 euros. Track your passport number.

France and Italy are the biggest beneficiaries, receiving more than two-thirds of tourists, and Spain's retail industry is also doing well.

“The continued absence of duty-free schemes is certainly having an impact on Selfridges' international sales,” said Andrew Keith, chief executive of the British luxury department store chain.

political dispute

The New West End Company, a lobby group representing tourist-rich London, says the UK's refusal to reinstate tax cuts after Brexit is more damaging than the recent cost of living crisis.

However, the UK government believes its policy will strengthen people's finances and not deter tourists. It asked the Office for Budget Responsibility, the government spending watchdog, to conduct an independent review in 2020 and again this year. The OBR estimates that closing the loophole would have delivered a £462m ($579m) benefit to public finances in the last financial year, even after taking into account the impact on tourism and spending displacement. This year it rose to more than £500m.

Tourism to the UK appears to be booming. Hotel occupancy in London rose above pre-pandemic levels in December, with a record 18.5 million passengers passing through Heathrow in the first quarter of this year, according to data from consultancy RSM UK. The city's famous Oxford Street is undergoing a renaissance.

With national elections scheduled for later this year, some luxury retailers have given up on the prospect of changing course.

“Is the Prime Minister going to stand up and say, 'I got this all wrong'?” Michael Ward, managing director of Harrods, spoke at the World Retail Conference in Paris last month. He said this. “I highly doubt it.”

With the opposition Labor Party expected to return to government, Mr Ward said tax rebates were “absolutely not on the table”.

Other retailers are still fighting the issue.

Thierry Andretta, chief executive of Mulberry Group, said: “If we want British brands to be able to invest in jobs, stores and talent, we need to entice international shoppers to spend their money in the UK. There is,” he said. “To do that, we need to offer them the same tax-free policies that they enjoy in other parts of the world.”

The British handbag maker, which has struggled in recent years, blames a 4% year-on-year drop in UK sales in the last 13 weeks of 2023 on the lack of VAT-free shopping. did.

“There is a missed opportunity,” said Paul Burns, CEO of the International Retail Federation. “In fact, our visitor numbers are currently as strong as the rest of Europe, but they're not spending. That's the difference.”

Global Blue's data does not include Chinese shoppers, whose numbers were less than half of pre-pandemic levels. Most of the tourists included in the data were from Middle Eastern countries (33%) and the United States (19%).

This article has been published from a news agency feed without modifications to the text. Only the heading has changed.

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