British shoppers are abandoning UK retailers and flocking to the EU countries to shop tax-free. VAT-free spending in Europe has increased fivefold among Britons from 2021 to a staggering £742 million last year, Association of International Retail (AIR) data shows.
The figures add to the pressure on ministers to reintroduce tax-free shopping for international visitors to the UK after former Prime Minister Rishi Sunak abolished the rule in 2021. Furious businesses say it has deterred people from shopping in capitals including London and Edinburgh and instead travel to Paris, Madrid and Milan..
It follows a string of UK high street closures announced throughout the country for the coming months, including Millets and Poundland, which will see 38 closures in August alone.
Derrick Hardman, chairman of AIR, told the Daily Mail it “no sense for the UK to remain the only destination in Europe not offering tax-free shopping”.
Hotelier Sir Rocco Forte added: “The decision of the last government to scrap tax-free shopping, which had been available for decades, should be reversed immediately.’ A HM Treasury spokesman said: ‘We are supporting the continued growth of this industry.”
Chancellor Rachel Reeves has been blamed for forcing restaurants and pubs to go into “survival mode” as, on average, a shocking two venues have closed their doors per day throughout the first half of the year.
The number of hospitality sites has also plunged by 374 to 98,746 sites at the end of June, market research firm NIQ and consultancy AlixPartners found.
Labour’s tax raid on employers has been blamed for the drop in locations.