West End business leaders have slammed the Chancellor for not changing his mind on an introduction of VAT free shopping for overseas tourists.
Despite calls from luxury retailers this month, Jeremy Hunt made no mention of the prospect of introducing tax-free shopping for overseas visitors making trips to London’s shopping heartlands.
Last month, Hunt announced a bonfire of tax cuts, reversing his predecessor Kwasi Kwarteng’s decision to introduce a digitised version of VAT-free shopping from 2024.
Retailers have said tourists are shunning London in favour of shopping sprees in Paris and Milan.
The Chancellor had “missed a trick” by not re-introducing the policy, as it would have been a “simple way” to boost retail, hospitality and leisure businesses, according to Kay Buxton, chief executive of Marble Arch London BID, said.
The Association of International Retail’s chief executive Paul Barnes dubbed the omission as a “bitter disappointment” to retailers from Bond St to the Bull Ring.
Research from the group, which represents luxury retailers in the West End and retail destinations such as Bicester Village, found the measure would generate £4.1bn of international spending annually.
It comes as British brand Burberry, which makes the iconic trench coat, said the government’s policy had hindered the country as a shopping destination.
While there had been a boost to tourism numbers, especially with visitors from the US, it had not been to “the same degree as we used to see,” Burberry’s finance and operating chief Julie Brown said on Thursday.
“More tourists are going to Paris, Milan and continental Europe,” she said.
“The UK is performing well, but we are now finding tourists are tending to go more to continental Europe, and that also has knock-on implications for other industries including hospitality and hotels.”