New West End Company issues ‘stark’ warning to government over tax-free shopping

The New West End Company (NWEC) has issued a “stark” warning to the government over tax-free shopping in a joint letter to chancellor Philip Hammond, signed by over 300 West End retailers.

In the letter, the trade body warned that the UK risked a further loss of international competitiveness post-Brexit if it failed to act to modernise the tax-free shopping system. NWEC said it was “very concerned” with the “slow pace” of the government’s plan to digitalise tax-free shopping.

Tax free shopping “contributes millions of pounds” to UK economy every year according to NWEC, who said failure to implement the digital process would damage London and the UK’s reputation as a global retail destination. According to the trade body, the UK is already falling behind.

In the letter, retailers claimed to have “lost confidence” in the treasury’s programme to digitalise tax free shopping, suggesting a need for a system that “focuses just on validation and that builds on, rather than replaces, the digital infrastructure that already exists”. The body said this system would be “faster, cheaper, less risky and less disruptive”.

NWEC claimed the tax-free shopping scheme was a major attraction to international visitors and said it created around £2.5bn of retail sales each year. According to research by the Centre for Economics and Business Research (CEBR) there is a net benefit to the treasury of up to £1.90 for every £1.00 refunded.

According to the trade body, Britain’s current paper-based system causes “long queues at exit ports which are sometimes so long that visitors have to abandon attempts to reclaim.”