50000 jobs at risk if U.K. Treasury scraps tax-free shopping

By guest author Sahar Nazir from Retail Gazette

  • Rishi Sunak warned that axing duty-free shopping could result in up to 50,000 redundancies
  • Over 40 MPs said the Chancellor’s decision to scrap the system will make the UK “less attractive”
Caption courtesy by Retail Gazette

Conservative MPs have reportedly warned Chancellor Rishi Sunak that axing duty-free shopping could result in up to 50,000 job losses.

More than 40 MPs said the Chancellor’s decision to scrap the system next year will make the UK “less attractive” to international visitors, Mail On Sunday reported.

The move could affect not just London, but airports and shopping centres throughout the country including in Edinburgh, Manchester and Bicester Village.

The MPs wrote in a letter that they believe this tax rise will set back the government’s levelling-up agenda.

They warned that wealthy visitors will desert London for Paris and Milan.

The Treasury said the scheme mostly benefits the capital and does not support the levelling-up agenda.

However, industry groups argue tax-free shopping is worth GBP 3.5 billion a year and supports 70000 jobs directly.

They predict a drop of 1.16 million visitors a year, mostly from China and the Middle East.

The Treasury said that around 92 % of visitors to the UK don’t use the VAT retail export scheme and extending it to the EU could increase total costs up to GBP 1.4 billion a year.

Last month, Ted Baker, The White Company and Paul Smith collectively wrote to the Chancellor urging him to reverse his decision to end tax-free shopping for tourists in the UK.

Other retailers such as Smythson, Rupert Sanderson and Hackett have also written in an open letter to the Chancellor saying “fashion brands need our country to be open for business”.

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