UK to miss out on tourism boom due to ‘layer upon layer’ of taxes
UK tourism is at risk of suffering a decline as visitors are deciding against going to Britain due to the Treasury’s stringent tax policies, a key industry official has said, in the latest sign of the toll tax hikes are taking.
Julia Simpson, the former British Airways chief who now heads up the World Travel and Tourism Council, told a conference in India that high fares in air passenger duty, visa fees and VAT for visitors – otherwise dubbed a ‘tourist tax’ – was repelling tourists.
Simpson warned that the UK will fail to attract excited tourists from India and China who will be key to growth in tourism over the next few years.
“The UK is absolutely taking travel and tourism for granted,” Simpson said.
“The Treasury is imposing layer upon layer of taxes on a sector that is bringing money into the UK and is not at all a burden.”
“If the Chancellor is looking for growth, and growth that isn’t in the public sector and is outside London, you’ve got to sell the UK,” Simpson added, according to the Telegraph.
A retail sector-led campaign for former Chancellor Jeremy Hunt to reintroduce tax-free shopping for visitors, as offered in major European economies, fell on deaf ears ahead of his final budget last year.
The Treasury claimed that scrapping the exemption would cost £2bn and it is unlikely to be brought back due to tightness in public finances.
Tourism under threat
Analysis commissioned by campaigners, which included the likes of Victoria Beckham and Sir Rocco Forte, found as many as 2m visitors were deterred from visiting the UK due to the absence of tax refunds provided from shopping in Britain.
Simpson said she was hopeful it would return in the coming years and help revive the UK’s fledgling tourism industry, which accounts for around 10 per cent of total UK GDP.
“If it is so bad, why does France, which receives more visitors than anywhere else in the world, have tax-free shopping? Why does Italy?”
She also had some stern words for Chancellor Reeves as she accused Labour ministers of relying on bureaucrats for policymaking.
“I’m very sorry to say, but the UK government is currently being run by Treasury officials instead of politicians who we’ve elected.”
Other added costs highlighted by Simpson as a barrier to boosting UK tourism included Reeves’ £20bn national insurance tax raid aimed at employers and the obligation of Americans to pay for a visa to enter the UK.
A government spokesperson said: “The UK is one of the most visited countries in the world and international tourism drives billions into our economy.
“We are supporting the continued growth of this industry and will be launching a National Visitor Economy Strategy this autumn to help meet our ambition to welcome 50 million international visitors a year to the UK by 2030.”