The U.K.’s decision to continue to impose duty taxes has resulted in a cost of £750 million annually, with high-spending Chinese tourists traveling to countries such as France, Spain, and Italy to enjoy VAT-free shopping.
The country’s government ended VAT-free shopping in early 2021, effectively ending the 20% VAT non-EU shoppers could claim when leaving the country.
“If you want your economy to do well out of the international visitor sector, you really want to be appealing to the Chinese, and the one thing that appeals to the Chinese is shopping,” said the Association of International Retail (AIR) chief executive Paul Barnes.
According to AIR, Chinese consumers, the most high-spending group compared to tourists from other countries, have been mainly choosing to shop in other EU countries since Brexit.
Since then, lawmakers have been making calls to reverse duty taxes. Former Prime Minister Liz Truss’s short-lived administration planned to reverse the ban. However, current Prime Minister Rishi Sunak and Chancellor Jeremy Hunt believe that tourists will continue to shop in the country, and the government wants to capitalize on the opportunity by imposing duties.
Market research indicates that the country could see billions of pounds flow into its economy if it reverses its decision.
