British shoppers are deserting UK stores and flocking to the EU to benefit from tax-free shopping.
VAT-free spending on the Continent by Britons increased fivefold from 2021 to £742 million last year, Association of International Retail (AIR) data shows.
The figures pile fresh pressure on ministers to reintroduce tax-free shopping for international visitors to the UK. Rishi Sunak scrapped it in 2021.
But the move enraged many businesses, and the Mail’s Scrap The Tourist Tax campaign was launched in support of calls for it to be reintroduced.
Campaigners believe that the decision to axe the scheme is driving tourists away from London and Edinburgh to cities such as Paris, Madrid and Milan.
Derrick Hardman, chairman of AIR, said it makes ‘no sense for the UK to remain the only destination in Europe not offering tax-free shopping’.
Hotelier Sir Rocco Forte added: ‘The decision of the last government to scrap tax-free shopping, which had been available for decades, should be reversed immediately.’ A HM Treasury spokesman said: ‘We are supporting the continued growth of this industry.’
Chancellor Rachel Reeves has been blamed for pushing restaurants and pubs into ‘survival mode’ as two venues have shut per day for the first half of 2025.
The number of hospitality sites plunged by 374 to 98,746 sites at the end of June, market research firm NIQ and consultancy AlixPartners found.
Labour’s tax raid on employers was blamed for the fall.
