Foreign shoppers shun West End over 'tourist tax'

Coronavirus – Mon Dec 27, 2021

The loss of tax free shopping for foreign tourist opened up a wide “spending gap” among wealthy visitors last year that hit central London hard, new figures show today.

Business group New West End Company (NWEC) said that while the number of tourists last year recovered to almost match 2019 levels, spending was 19% down. The differential was at its widest during the peak summer quarter when spending lasgged 31% behind visitor numbers.

The effect was most marked among affluent visitors from Middle East countries such as Saudi Arabia, the UAE, Qatar and Kuwait. There were 39% more travellers from the region in the last three months of 2023 compared to the same period in 2019, but spending increased by just 6% –  a gap of 33 percentage points.

That trend is replicated by visitors from other major tourism markets Over the course of 2023, 8% more Americans visited London, but they spent 14% less

Speaking on the day it was confirmed the UK fell into recession last year NWEC boss Dee Corsi said: “Tax-free shopping presents a rare, golden opportunity for the Government to inject a shot of growth into the economy, with a tried and tested scheme and a captive audience which, for the first time, would include 450 million EU residents.

“We are still within the window to capitalise on this opportunity, with businesses across the country united in their desire to see tax-free shopping reinstated. The news that the OBR will look at the impact data is a welcome acknowledgement, at the highest levels, that our calls are being heard. We are hopeful that the Spring Budget will see these calls answered.”

Chancellor Jeremy Hunt has asked the Office for Budget Responsibility to prepare a study on the costs and benefits of the VAT-free perk for foreign tourists ahead of the Budget.

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