The Conservatives say they would restore tourist tax-free shopping in Great Britain if elected.
Why it matters: The move would reverse a post-Brexit retail policy change that hit tourist spending in Great Britain. It could especially affect department stores, luxury retailers and high-street chains that rely on overseas visitors.
- The Conservatives say they would first restore tax-free shopping for non-EU tourists, with possible later expansion to EU visitors.
- The VAT Retail Export Scheme and the tax-free shopping concession in Great Britain ended on Jan. 1, 2021, after the Brexit transition period closed on Dec. 31, 2020.
- The party cites Cebr analysis saying full restoration could add up to 2.35 million visitors and £4.1 billion in spending.
- GOV.UK says VAT-free shopping still applies in limited cases, including goods exported directly to an overseas address, but not the former tourist refund scheme.
The Conservative Party says it would bring back tourist tax-free shopping in Great Britain if it returns to government, reversing a post-Brexit change that ended the old refund scheme for overseas shoppers.
The policy was set out in a party announcement reported by Yahoo Finance, which said the proposal would start with non-EU tourists and could later extend to EU visitors if the scheme covers its cost.
HMRC says the VAT Retail Export Scheme and the tax-free shopping concession in Great Britain ended on Jan. 1, 2021, after the Brexit transition period ended on Dec. 31, 2020. HMRC brief
GOV.UK guidance says VAT-free shopping still exists in limited circumstances, including when goods are exported directly to an overseas address, but not for the former in-luggage tourist refund scheme in Great Britain. GOV.UK guidance
The Conservatives cite analysis from the Centre for Economics and Business Research saying full restoration could bring up to 2.35 million additional visitors and £4.1 billion in spending. A 2020 government assessment said ending the scheme was expected to reduce tourist numbers in Great Britain by about 20,000 to 30,000 a year, based on 2019 usage. Government regulations
By the numbers
- 2.35 million - additional visitors the party says full restoration could bring, citing Cebr
- £4.1 billion - estimated spending lift cited by the Conservatives
- 20,000 to 30,000 - annual tourist decline the government estimated after ending the scheme
What's next: The proposal would only take effect if the Conservatives return to government.