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Chancellor Jeremy Hunt has reportedly asked the Office for Budget Responsibility to look at whether the scrapping of VAT-free shopping for tourists should be reversed, delivering a much-needed boost to Britain’s retail and leisure sectors, according to The Sunday Times.
The Office for Budget Responsibility (OBR) has been asked to “examine the costs and benefits” associated with Rishi Sunak’s decision to end tax-free shopping schemes for tourists in 2020.
Richard Hughes, chairman of the OBR said in a letter to Conservative backbenchers that the review comes “in the light of subsequent evidence on international visitor numbers and their consumption patterns and the analysis carried out by a number of outside bodies”.
The results will be published alongside the Budget next month.
It comes as Heathrow Airport boss Thomas Woldbye, British Chambers of Commerce (BCC) director Shevaun Haviland, and Tina McKenzie from the Federation of Small Businesses (FSB) warned Britain was losing its “hard-won reputation” for iconic retail.
A Treasury spokesperson told The Sunday Times: “We keep all taxes under review and recognise the value that retailers bring to Britain. That is why we announced a £4.3bn business rates package at Autumn Statement to support businesses and the high street.
“VAT-free shopping remains available for all non-UK visitors buying items in store and having them sent directly to their overseas address.”
