The “tourist tax” is costing the UK £10.7bn in lost GDP and deterring two million tourists per year, the Centre for Economics and Business Research (CEBR) has revealed. The economic consultancy found the extra sales generated by reinstating VAT-free shopping for tourists would outweigh losses associated with sales tax refunds by £2.3 billion in 2023.
An open letter to the Chancellor, describing restoring the traditional VAT rebate on shopping by foreign tourists as a “spectacular own goal” for the UK economy, has been signed by 350 business leaders. Meanwhile, MPs across all parties have called for the “tourist tax” to be scrapped. The move has effectively made the UK the most expensive place to shop in Europe, says the research.
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