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Rishi Sunak and Jeremy Hunt are facing Tory rebellion over VAT free shopping

Rishi Sunak and Jeremy Hunt face Tory rebellion over VAT-free shopping as critics say tourist spending has fallen since the benefit was abolished post-Brexit

  • Chancellor Jeremy Hunt said doing away with VAT-free shopping would save £2bn a year
  • Lack of wealthy tourists means Mulberry could close its flagship Bond Street store
  • Tory MP Sir Geoffrey Clifton-Brown warned: ‘it will affect jobs and businesses’

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Calls to bring back VAT-free shopping for international tourists intensified yesterday amid fears the UK could lose out to European rivals.

Sir Geoffrey Clifton-Brown, Deputy Chairman of the Commons Public Accounts Committee, argued that the problem was hurting the economy.

His warning came hard on the heels of luxury handbag maker Mulberry, who said it could potentially be forced to close its flagship Bond Street store as wealthy foreign visitors stay away.

By shopping VAT-free, tourists can claim back 20 percent of their purchases. It was first abolished by then Chancellor Rishi Sunak when the UK left the EU.

Vat-Free Shopping Was First Abolished By Then-Chancellor Rishi Sunak When The Uk Left The Eu

VAT-free shopping was first abolished by then-Chancellor Rishi Sunak when the UK left the EU

Kwasi Kwarteng tried to reintroduce it into his ‘mini-budget’, but new Chancellor Jeremy Hunt reversed the plan, claiming it would save the Treasury £2bn a year.

Every country in Europe charges a VAT rate of at least 15 percent, but offers a refund for foreign visitors who take purchases home.

Critics said Mr Hunt’s U-turn on the plans would be a ‘hammer blow’ to tourism and high street shopping, delaying the return of international visitors and costing the government more in lost tax revenue elsewhere.

Tory MP Sir Geoffrey said: ‘It will affect jobs and businesses. And think of the extra trade we’d be doing leading up to Christmas if we had this.”

Luxury Handbag Maker Mulberry Said It May Be Forced To Close Its Flagship Bond Street Store As Wealthy Foreign Visitors Stay Away

Luxury Handbag Maker Mulberry Said It May Be Forced To Close Its Flagship Bond Street Store As Wealthy Foreign Visitors Stay Away

Luxury handbag maker Mulberry said it may be forced to close its flagship Bond Street store as wealthy foreign visitors stay away

He added: ‘I’ve tried to convince the Treasury that it won’t cost £2bn. I think it is cost neutral and will probably even benefit the country.”

Mulberry boss Thierry Andretta said British shoppers were traveling to Europe to pick up luxury goods as he called on the government to act.

Former company secretary Jacob Rees-Mogg said: “[It] brings in additional business that would otherwise not make it to Britain. It helps to grow the economy and this increases tax revenue organically.”

Tory MP Nickie Aiken said the UK was losing visitors to Paris and Milan and called on the government to reinstate the tax break ‘as soon as possible’.

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Jacky

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