The Conservative party has announced its intention to restore VAT refunds for eligible visitors if it forms the next government. Andrew Griffith MP, the Conservative Shadow Chancellor, stated that this move aims to boost British businesses, including retailers, hotels, restaurants, and attractions.
The initial phase of the scheme would apply to visitors from outside the EU. Any extension of the scheme would depend on detailed, data-based evaluations by the Treasury demonstrating a net economic benefit.
According to independent research conducted by Cebr, fully restoring tax-free shopping could attract up to 2.35 million additional visitors and generate £4.1 billion in extra spending. The research also suggests that for every £1 of VAT refunded to tourists, an additional £1.56 could be generated in other taxes.
The Conservatives argue that the abolition of tax-free shopping in 2021 put the UK at a disadvantage compared to other major European destinations, with real-terms visitor spending now lower than before its removal, according to VisitBritain.