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The loss of tax-free shopping cost West End retailers £220m in unrealised sales in the first half of 2024, according to data from the New West End Company (NWEC).
NWEC also claimed that the policy change cost West End retailers £400m in 2023.
The number of international tourists visiting London rose 3% in the first half of 2024 versus H1 2019, but NWEC stated that international visitor spend fell 12%.
According to Global Blue data, international spending in Europe has risen 36% in H1 2024 compared with H1 2019.
As a result, NWEC is calling on the government to reinstate that tax break in the next budget.
Dee Corsi, chief executive of NWEC, said: “It is bittersweet for the West End that, whilst London remains a highly desirable global travel destination, the absence of tax-free shopping continues to act as a drag on overall spending growth.
“Critically, the loss of £400m in unrealised sales last year in the West End alone is just a small part of this story; fewer sales on the shop floor means fewer tourists in restaurants and hotels, and a knock-on impact on our entire tourism ecosystem. If the Government is serious about returning the country to growth, tax-free shopping presents a rare, golden opportunity to do so.”
