Retailers in the West End of London want to extend tax-free shopping to EU shoppers after Brexit.
This will help them to get through the slump in sales following a slow recovery from the coronavirus lockdown. Footfall on London’s main shopping streets is down on pre-COVID 19 levels. It rose 12.7 per cent in the week to August 22nd, but this is still down 62 per cent on this time last year. Meanwhile, footfall is down 50 per cent in other regional cities and 30 per cent in outer London, according to Springboard.
The organisation’s chairman, Peter Rogers, is calling for tax-free shopping to be extended to EU visitors once the Brexit transition period ends in December. His letter has signatures from over 70 executives including retail groups like Harrods and H&M.
>See also: How to cope with the slow return to trade post-lockdown
Why would extending tax-free shopping help businesses?
Statistics from NWEC, international tourists spend over £6bn, over half of which is tax-free. And for every £1 refunded, HMT gains £1.90 in other taxes from increased international visitor numbers and spending.
Most (70 per cent) of all international visitors to the UK are from EU member states but are unfortunately excluded from the tax-free shopping scheme. Figures show that including them after we leave the EU could add up to £1.4bn in retail sales annually and benefit the UK economy by £2.1bn.
As is stands, tax-free shopping schemes from other EU member states specifically exclude other EU member states as they’re in the customs union. This means that after Brexit, UK shoppers will automatically be eligible for tax-free shopping, but the same doesn’t apply for member states shopping here.
New West End Company wants to address this imbalance by opening tax-free shopping to EU member states.
The body has also called for a rapid digitalisation of tax-free shopping.
“It is clear that the slow recovery of international visitor numbers will be led from Europe as traditional long-haul markets are slower to recover,” Peter Rogers told the Financial Times.