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Business groups join the Mayor of London in urging the Government to reintroduce VAT-free shopping

Wednesday 1 February 2023

London Chamber of Commerce and Industry (LCCI) Chief Executive, Richard Burge has signed a joint letter with the Mayor of London, Sadiq Khan, urging the Government to reintroduce VAT-free shopping for international visitors to London as soon as possible.

Written on behalf of London businesses and business groups, the letter calls for the Government’s support in encouraging the return of international tourists back to London by the reintroduction of the VAT Retail Export Scheme and airside tax-free shopping. The letter emphasises dependency of London’s complex ecosystem on domestic and international tourism and underscores how the return of VAT-free shopping would provide a much needed boost to London’s retail and hospitality sectors during this incredibly difficult economic period.

Specifically, the letter calls for the Government to request an independent assessment by the Office for Budget Responsibility (OBR) of the full impact of tax-free shopping on the UK economy and tax revenues so that a well informed decision can be made. In what is a highly competitive international market, it is vitally important for the Government to do everything within its power to increase post-pandemic footfall and reaffirm London’s credentials as the preeminent global city and tourist destination of choice.

Richard Burge, Chief Executive of London Chamber of Commerce and Industry (LCCI), said: “We were hugely disappointed by the removal of VAT free shopping for tourists in November which was an unnecessary and disappointing blow for London’s businesses. We are competing against Paris and Milan and we cannot lose any competitive advantage which could lead to lost jobs. The economic cost of the scheme is minute compared to the overall economic gain of increased numbers of tourists spending more money in the UK, especially in our capital. London is the preeminent global city and the gateway to the rest of the UK. The Government must do everything within its power to ensure London’s position on the world stage is not compromised by forcing tourists to choose alternative destinations.”

Alongside the Mayor of London, co-signatories of the letter included Ros Morgan, CEO of Heart of London Business Alliance, Chris Hayward, Policy Chair of the City of London Corporation, and Julie Brown, COO & CFO Burberry Group PLC.

Read the letter in full.