Oct 9, 2020
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MPs demand evidence from Treasury for duty-free change

Oct 9, 2020

A committee of MPs has written to the UK’s Chancellor asking for evidence behind The Treasury’s decision to end tax-free shopping for tourists in its current form.

Tourists won't be able to claim back their VAT at UK airports from next year - Photo: Pexels/Public domain

The Treasury Committee’s chairman Mel Stride, who's a Conservative MP and would usually be expected to support the current government, wants Chancellor Rishi Sunak to provide a cost analysis.

The Telegraph reported that the request comes after it emerged this week that the consultation process on the changes that the government ran gave retailers the misleading impression that duty-free shopping would actually be expanded (to include EU tourists), rather than curtailed.

The government plans to end the ability of non-EU overseas shoppers to claim back their VAT at the airport when they return home from 2021. It claims it will generate an extra £500 million a year in VAT receipts and that shoppers will still be able to access the perk if they ship their goods home rather than carrying anything they’ve bought themselves.

But retailers say the VAT receipts will be much lower as fewer tourists will choose to visit Britain to shop. They also say tourists aren’t interested in ship-to-home shopping options.

Stride was quoted saying that evidence from retailers is that the changes will be a major blow and that "it could be seen as the UK imposing a tariff on its own exports.”  

He also said that such a big change would usually come with a big announcement rather than the low-key release of last month and should be accompanied by relevant costings.

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