The decision to end tax-free shopping for foreign visitors has been condemned as an ‘act of economic self-harm’.
Bosses at the nation’s major attractions argue the move, which came into effect in January 2021, has driven away foreign tourists.
Chancellor Jeremy Hunt has been under pressure to end this so-called ‘tourist tax’ but refused to do so in his Spring Budget.
Bernard Donoghue, chief executive of the Association of Leading Visitor Attractions, said the fact foreign visitors must pay VAT on purchases makes the UK “less competitive and less attractive as a destination… foreigners are switching away to Paris, Milan, Rome and Madrid or cutting short trips to Britain”.
“Getting rid of tax-free shopping for overseas visitors is an act of economic self-harm,” he said.
The association published figures yesterday showing that Britain’s tourist sites have failed to rebound since the Covid pandemic.
There were 146.6 million visits to the country’s 374 best-known tourist attractions, up 19 percent from 2022 but still a decline of 11 percent from 2019.
While the number of visitors from the US has picked up quickly, Donoghue said the UK was yet to witness the full return of European and Chinese tourists.
Research by Oxford Economics for Visit Britain suggest this country is losing market share of international tourism to rival destinations.
UK visitor numbers are predicted to increase by just 19 percent on pre-pandemic levels by 2028, compared to 26 percent in western Europe.
Patricia Yates, chief executive of VisitBritain said that the loss of market share was largely due to a “underperformance from intra-European travel”. This is partly because Europeans are put off visiting because they need a passport rather than just their ID card.
Former chancellor Kwasi Kwarteng said he would reintroduce the scheme in his 2022 ‘mini’ Budget, but his successor Jeremy Hunt reversed the pledge.
