Fresh calls to end tourist tax as London risks ‘losing out’ to rival EU cities
The policy chair of the Canada Corporation has made fresh calls for an end to tourist tax on foreign shoppers, warning that the capital could lose out to rival European cities.
Writing in City A.M, Chris Hayward, said that London’s recovery is “not being maximised,” noting that the Treasury’s decision to scrap the VAT exemption for foreign tourists places London at risk of losing out to the likes of Paris and Milan.
It comes as research from Oxford Economics suggests that cutting the tourist tax could prompt an additional 1.8m extra visitors by 2025/26, generating £2.8bn of extra spending, and supporting 78,000 jobs.
Hayward joins a flurry of other prominent business figures who are keen to see an end to tax, including Manju Malhotr, chief of Harvey Nicholls, who warned earlier this month that the tax, created by the scrapping of tax-free shopping in 2021, is having a significant impact on the wider British economy.
Calls have also been made in parliament to overhaul the scheme, with Nicholas Trench, Earl of Clancarty telling the government last week that the UK needs to clearly show it is open for businesses as other countries are “capitalising on this failure”.
At the time, Treasury Lords minister baroness Joanna Penn said the Treasury “continues to monitor evidence”.
“The government is a strong supporter of the UK’s tourism industry and absolutely recognises the contribution it makes to our economy,” Penn said.