Heathrow Airport Advocates for the Repeal of UK's VAT on Tourists

Heathrow Airport Advocates for the Repeal of UK's VAT on Tourists

Posted by Emily on 13th Feb 2024

Heathrow Airport executives are championing the movement to reinstate VAT-free shopping for international visitors before the upcoming Spring Budget. Dale Reeson, Heathrow's Director of Operations, expressed his enthusiasm for aligning with the British Chambers of Commerce and the Federation of Small Businesses to eliminate what he terms the "tourist tax," aiming to equalise opportunities for UK enterprises. The policy shift occurred in January 2021 post-Brexit, ending the VAT retail export scheme and precluding non-EU tourists from receiving sales tax refunds accumulated during their visit. This places the UK as the sole European nation not extending tax-free purchases to visitors from outside the EU, a situation that hoteliers note is diverting tourists towards other destinations with more favourable tax arrangements.

Reeson highlighted the criticality of the UK's position in the global market, pointing out that the absence of tax-free shopping puts the UK at a disadvantage, with tourists opting for countries where they can save up to 20% on purchases. He advocates for a policy overhaul in the Spring Budget to enhance the competitiveness of every UK town and city. Chancellor Jeremy Hunt indicated a potential reconsideration of this policy in a promising development, with the Spring Budget announcement anticipated on March 6.

Supporting this call, a study by the Centre for Economics and Business Research (CEBR), commissioned by the Daily Mail and Sir Rocco Forte, underscores the significant economic benefits of reinstating VAT rebates for tourists. The report projects a £10 billion injection into the economy, creating new jobs and an additional £2 billion for the treasury, emphasising the profound impact of such a policy reversal.

We encourage our readers to share their thoughts and perspectives on this issue below. Your insights are invaluable as we navigate the implications of these potential changes for the UK's tourism and economy.