Four major trade bodies have written a joint letter to the Chancellor urging her to reinstate tax-free shopping for tourists amid decreasing US sales and continued struggles on British high streets. The groups, representing retailers, fashion giants, beauty brands and luxury businesses, reportedly warned Donald Trump’s tariffs could cause long-term damage to British competitiveness.
“US tariffs will negatively impact our businesses’ profitability,” the British Retail Consortium, the British Beauty Council, Walpole and the British Fashion Council wrote in a joint letter, seen by The Times, to Rachel Reeves. “We are considering how we, as associations, and the UK government could best support businesses at this time.” They warned disruption caused by the White House’s controversial policy, which has caused economic turbulence worldwide, is leading some UK firms to cancel orders or withdraw from the US market, while others are facing demands from American buyers to cut pressures.
The Times reports the groups urged the Government to reintroduce tax-free shopping for tourists to help cope with falling US sales and improve the UK’s appeal as a global shopping destination.
They said American shoppers are more likely to travel to fashion hubs like Paris and Milan, rather than the UK, where a tax rebate scheme is in place.
In the letter, the bodies argued the policy is “not a luxury” but a “proven growth strategy”.
The policy, which allowed tourists to get back 20% VAT on UK transactions, was scrapped in 2021 by the Conservatives.
Affluent tourists spend 14 times more than the average visitors, according to data from consulting firm Bain & Company, with shopping one of the biggest outlays.
Visit Britain has forecast that inbound spending by tourists in 2024 would stay almost 10% below pre-pandemic levels, The Times reported.
A Treasury spokesman told the newspaper: “We have no plans to introduce a new tax-free shopping scheme in Great Britain. Visitors can continue to claim VAT relief where the items purchased are shipped directly to their home country as exports.”