UK Treasury Rejects Calls to Reinstate Tourist Tax Refunds

The UK Treasury has firmly rejected demands to reconsider the removal of VAT-free shopping for tourists, despite fierce backlash from retailers and political figures. Over 500 business leaders have supported campaigns to reinstate the refund scheme, claiming it would boost tourism and economic growth. Chancellor Rachel Reeves faces criticism for refusing to review the policy, even as businesses struggle with rising costs.

Critics argue the decision, originally made by Rishi Sunak in 2021, has damaged the UK’s appeal to international shoppers. Many retailers claim the tax discourages tourists from spending, hurting businesses already grappling with inflation. The Treasury, however, maintains that offering tax cuts to foreign visitors would send the wrong message.

The debate highlights tensions between economic recovery efforts and fiscal policy. While businesses see VAT refunds as a ’no-brainer’ for growth, the government remains unmoved. The standoff leaves retailers frustrated and tourists paying more, with no resolution in sight.

UK economyVATtourismretailtax policybusiness growthRachel ReevesRishi Sunakbudgetshopping