The value-added tax on tourism in Rishi Sunak will eliminate jobs and impede the economy’s recovery from the coronavirus


Since the referendum, Brexit supporters have promised that leaving Europe would enable Britain to become a supercompetitive global power.

Without restrictions from European Union trade rules and regulations, we will be able to unleash our potential to win new customers from all over the world, far from the borders of Europe.

However, the chancellor, a longtime skeptic of the European Union, points to massive changes in VAT rules that will make Britain much more expensive for the heavily-spending tourists on whom hundreds of thousands of British jobs depend.

Jobs in retail, hospitality and design have just spent billions of pounds with vacation pay.

Within four weeks, new laws will end the decades-long customs duty-free system for travelers from outside the European Union. The result will be making shopping here 20 percent more expensive for them.

We would be by and large the only country in Europe that did not offer such concessions to tourists. The government said that this step would help reform the country’s finances by providing 524 million pounds sterling, describing it as closing a tax loophole for the wealthy in London.

But this is a phone number.

In fact, it will have the opposite effect; Deter visitors from the entire UK and cost thousands of jobs.

How does this help us in resisting the economic Covid crisis?

Tourists will spend elsewhere

Shops, designers and heads of tourism are convinced the tax will stop visitors from coming to Britain and send them to Paris and Milan instead.

The difference that they will see in the UK rates is huge. For a £ 10,000 hour at Bond Street jewelery, shoppers would lose a £ 2,000 discount in VAT. On Burberry coat £ 1,000, £ 200.

Ministers believe that tourists are not very capricious. They say people will still come to their legions because the pound is so weak. This argument has no logic.


Shoppers on Oxford Street

/ Palestinian Authority )

It’s an indication of the fact that when the pound collapsed after the Brexit referendum, tourism numbers to the UK set record highs as Britain became a low-cost option.

But this more than anything highlights the interest of foreign travelers in the price.

It also assumes that the pound will remain forever weak in light of Brexit.

This is a strange view that the pro-Brexit government should take. The British Pound is weak because global investors believe leaving the European Union will harm our economy in the long run. To be sure, if Brexit is a good idea, its proponents should expect the economy to thrive, the pound’s gain and cancel the effect of currency discounting on UK prices.

France is already benefiting

French President Emmanuel Macron has revealed evidence of how illogical Britain is.

Within days of Britain announcing the plan, he announced that visitors should come to France instead, and cut the value of goods on which value-added tax can be refunded from 175 euros to 150 euros.

Ireland is planning something similar.

All treasury accounts are wrong

When Rishi Sunak announced the move in September, he said Britain would take back 528 million pounds in taxes.

Even if this is true, this saving is minuscule in terms of treasury, and will be outweighed many times over by lost taxes from tourists who stay far away.

Taken into account all the losses in spending on hotels, restaurants and shopping, the real loss to the Treasury would be around £ 3.4 billion and the overall loss to the UK economy would be around £ 6 billion, according to analysts Global Blue.

If you can buy a handbag at 20% off in Paris, why not?

Anne Beecher, Managing Director, Selfridges

Selfridges has stores in London, Manchester and Birmingham and we welcome international customers year-round.

We know what our customers want and we’ve invested millions of pounds in our business and created thousands of jobs to meet those needs.

We know, for example, that our Chinese customers are price sensitive and choose their travel destinations based on the available shopping.

If you can buy a handbag 20 percent less in France, why not?

We know from our customers in the Middle East, who love to eat in London and stay in hotels, that they will shorten their stay here to spend more time in Europe.

Visitors come to the UK to shop, but they also come for culture and hospitality.

We are just one part of a much larger tourism ecosystem that welcomes and supports visitors in the UK.

Instead of building back better, the result of canceling tax-free shopping as he explained to the government is that an estimated 40,000 jobs will be transferred from these industries.

The Treasury Department rejected the concerns raised by retailers and companies and refused to accept numbers provided by respected sources.

After reviewing the spending, the Office of Budget Responsibility reported that the Treasury had overestimated the savings to the Treasury, and that even the lowest estimate was “highly uncertain”.

We ask the government to do what it can to make the UK competitive and attractive when people start traveling again.

As an exceptional year ends with Brexit, we are asking the Treasury to stop and review the decision to cancel tax-free shopping.

The government’s numbers were disputed last week by its own office of budget responsibility. As part of Sunak’s comprehensive spending review, OBR said short-term savings would be only £ 350m, not £ 528m.

The Treasury Select Committee has written to Secretary of the Treasury, Jesse Norman, expressing grave concern about why the government has not yet published an adequate assessment of the impact of such an important step. What do they have to hide it?

Jobs are being lost across the UK

The government is directing the move to its new voters in the north as a way to extract taxes from wealthy London. It says focus groups agree with it.

But the loss of these heavy-spending tourists threatens tens of thousands of jobs across the UK. It is true that 60,000 will go to London, but thousands more will strike in the shops, hotels and restaurants of other tourist attractions. York, Manchester, Cotswolds, Edinburgh.

Not only stores will suffer. Thousands of skilled artisans creating luxury goods across the UK will be affected. Mulberry manufactures handbags in Somerset. Burberry and Barbour manufacture coats in Yorkshire and Tin Wear. Church’s shoes are made in Northampton. These are the things that tourists love to buy here.


The Treasury argues that it cannot reverse the decision to cancel the tax exemption for non-EU visitors as that could mean extending it to the rest of the European Union after Brexit. The message says we will lose £ 900m in taxes.

But, as with its fake £ 528m figure, this ignores the fact that if we offer them duty-free treatment, more will come, boosting hotels, restaurants and stores, and bringing in extra taxes.

Why not, as we leave the European Union and try to find our way out of the economic nightmare of the Covid virus, we give the country a boost from new tourists who are spending huge sums to cushion the blow?

The whole idea has been expedited without any advice. At the very least, it should be paused until alternatives are considered.

Firing store workers, cooks, and craftsmen when they are in a state of downfall is pointless.

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