Dear Chancellor,

I am writing to express my disappointment at the proposed changes to tax-free shopping from 31^st December 2020.

The repercussions of this decision will be significant and long-term for many of our clients and deliver yet another set-back for a sector that has been at the forefront of the challenges posed by the Covid-19 pandemic.

London is undoubtedly one of the greatest cities in the world; steeped in history with a mix of culture, strategically located and a major draw for international visitors from all over the world. According to the Association of International Retail, in 2018, international tourists spent £22bn in the UK, £6bn of which was spent on shopping, and whilst VAT was reclaimed on £2.5bn of those purchases, it was paid on the additional £20bn they spent. Furthermore, 20% of tax-free shopping in the UK is outside of London, proving how consequential this would be be for Britain’s other major cities.

By making these changes to tax-free shopping, Britain will be the only European country not to offer immediate VAT relief to international visitors, in turn paving the way for fewer international visits, lower spending on retail and other goods, an increase in tax-free spending in other major European cities and a further loss of jobs in the retail sector – a sacrifice the sector can ill-afford to make.

Spending in the West End of London is already down 80% y-o-y, with footfall down 50%, as a result of Covid-19 and the retail sector continues to be saddled with structural and financial difficulties. I am supportive of NWEC’s plea to find a suitable digital response and I also urge the Government to reconsider its decision in order to maintain London and the UK’s international appeal and preserve the vital source of inward investment international retail provides.

Yours sincerely,

Rhodri Davies, Head of UK Retail, CBRE