Britain’s much-hated ‘tourist tax’ is causing foreign visitors to part with less cash when in the UK, experts warn – while spending levels in France, Spain, Italy and Germany soar
- Industry experts have called the findings ‘concerning’
Rishi Sunak faced fresh pressure to bring back tax-free shopping for holidaymakers last night as new data showed tourism has still not recovered to pre-pandemic levels.
Official statistics revealed that inbound visits to the UK were down 7 per cent in October to December last year, compared with the same period in 2019.
Industry experts said the Office for National Statistics data was concerning and warned that the removal of tax-free shopping was likely to be a major factor.
The Daily Mail’s campaign to ‘Scrap the Tourist Tax’ has highlighted concerns that Britain’s economy is being held back by the Government’s refusal to reinstate the benefit.
More than 200 leading business chiefs from across the retail, hospitality and tourism sectors, and dozens of senior MPs – including two former chancellors – have voiced their support.
Rishi Sunak is being called upon to bring back tax-free shopping as data shows figures still haven’t reached pre-pandemic levels
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The data showed the UK welcomed 31.2million visits in 2022 –down 24 per cent compared to 2019. Visitor spending was also down by 7 per cent to £26.5billion in 2022 – but when inflation is taken into account, visitor spend was 17 per cent below 2019 levels.
Separate data published earlier this year showed that spending levels in France and Spain were more than three times higher than pre-Covid, while spending was more than double 2019 levels in Italy and Germany.
Dee Corsi, chief executive of the New West End Company and chairman of the Association of International Retail, said: ‘The UK’s failure to recover is concerning when compared to the uplift being seen elsewhere in Europe.
‘The only factor that can explain a difference in growth is the removal of tax-free shopping, which puts us at a 20 per cent price disadvantage. Our fear is that as awareness of the tourist tax grows, our reputation as a leading global shopping destination will shrink.’
Steven Medway, chief executive of the Knightsbridge Partnership, added: ‘Tourist spending in the UK may be returning to 2019 levels, but key markets on the continent are at twice that level.
‘The only real distinguishing factor between these markets is tax-free shopping.’
The Treasury claims reinstating tax-free shopping would cost £2billion a year, but research suggests there would be a net gain of around £350million a year because of the knock-on benefits.
Campaigners say the additional tourists who would be attracted to Britain would spend across the economy and country – generating separate tax revenue.
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