Rishi_Sunak, Tory chancellor

Urgent Call for Tory U-Turn Over Damaging Tourist Tax Plans

The Chancellor (pictured) has come under further pressure to urgently U-turn on damaging plans to scrap tax-free shopping for overseas visitors to the UK.

The Treasury earlier announced that it intends to withdraw the VAT Retail Export Scheme (RES) and airside Extra-Statutory Concession (ESC) to non-EU visitors from 1st January 2021.

The schemes allow overseas visitors to receive a VAT refund on items bought in the UK and tax-free sales at UK airports.

Ahead of a debate on the future of the high street in Westminster today, the SNP’s Business and Industry spokesperson echoed concerns raised by business leaders who warned that around 40,000 jobs in the UK and around £1bn worth of investment could be at risk as a result of the move.

Meanwhile, Les Echos – a French financial paper – asked bluntly why the UK government was “shooting itself in the foot in terms of competitiveness, at the very moment when France is preparing to extend its tax refund?” 

Business leaders in Scotland – including the Scottish Chambers of Commerce and the Scottish Retail Consortium – also warned that the pandemic has been “hugely challenging” for businesses, and that they are “deeply concerned” at the decision to abolish the VAT-free schemes.

Commenting, the SNP’s Business and Industry spokesperson Richard Thomson MP said:

“We have already seen this year the devastating toll the coronavirus pandemic has taken on businesses across Scotland and the UK – with tens of thousands of job losses and businesses pulling down their shutters.

“At this critical time, it is an act of economic recklessness that the Chancellor intends to plough ahead with plans to scrap VAT-free shopping for overseas visitors – with business leaders warning that around 40,000 jobs could be at risk and overseas shoppers put off from coming to the UK.

“Tourism is a vital part of Scotland’s economy and these plans will do nothing less than push many retailers to the brink.

“The tourism, retail and hospitality sectors have been acutely affected by the pandemic, and any further harm inflicted upon them by UK government policy would be catastrophic for these industries and their supply chains.

“The impact of either a low deal or no deal Brexit is also coming into full view and it is not an inviting sight for thousands of businesses in Scotland.

“It’s clear that the only way to protect our economy, jobs and businesses is to become an independent country with our place in the EU.”