What is City Talk? City Talk allows marketers to connect directly with our audience by publishing content on morningwire.eu
 |  Updated: 

Central London Alliance calls on Treasury to reinstate tax-free shopping and generate an estimated £10 billion

By:

Add as a preferred source on Google

Ahead of the budget announcement on 6 March 2024, Central London Alliance (CLA) has submitted a proposal calling for the Treasury to reinstate tax-free shopping in efforts to help the retail sector recover from post-pandemic challenges.

CLA backs requests by the retailers to reintroduce the scheme allowing foreign visitors to the UK to shop tax-free. The Association of International Retail estimated that £1.5 billion was lost from retail in 2022 and last week Heathrow Airport announced that in the first quarter of 2023 its retail spending was at 26 per cent below that of 2019, despite visitors being close to 2019 levels.

While retail spending in mainland Europe was at 198 per cent of 2019 levels, the UK is at -28 per cent. The only thing that can explain this is that the UK is the only European country not offering tax-free shopping.

Reintroducing tax-free shopping for European visitors (who make up two thirds of visitors to the UK) alone could generate £5 billion in retail spend, as well as a further £5 billion in spending on other goods and services. Half of the total £10 billion could be spent outside of London in efforts to level up the rest of the UK, as well as being invested back into the hospitality and travel sectors that are struggling under the pressure of rising business costs.

“Central London Alliance urges the Treasury to reconsider its 2021 decision to remove the longstanding scheme that allowed foreign visitors to shop tax-free in the UK,” said Tony Matharu, CEO and Founder of Central London Alliance and Blue Orchid Hospitality. “Reintroducing tax-free shopping would provide the hospitality, retail, and travel sectors much-needed support in helping businesses struggling with the high cost of doing business stay afloat, as well as boosting the path to a revitalised economy for central London and the whole of the UK.”

CLA also called on the Government to freeze the business rates multiplier, which is set to rise an estimated £1 billion in line with inflation in April, equating to £10,000 per individual venue in business rates nationwide. With 10 hospitality venues being closed each day in 2023, this is not a cost the hospitality industry can front.

“Freezing business rates would provide short term relief for struggling businesses across the nation, particularly in London where the cost of doing business is highest,” commented Tony Matharu. This action could save businesses £234 million and – as the hospitality sector was identified as the highest contributor to the national inflation rate – could also prevent inflation in the economy as a whole.