Britain missed out on £1.3billion in lost spending by Chinese visitors last year because of the ‘tourist tax’, research has revealed.
As Beijing rolled out the red carpet for Prime Minister Keir Starmer, retail and leisure bosses reiterated their calls for Labour to reinstate tax-free shopping.
Before the initiative was axed in 2021, tourists from outside the EU – including China – could receive a VAT refund on purchases in the UK, essentially making items 20 per cent cheaper.
Chinese visitor numbers to the UK last year were just 82 per cent of 2019 levels, according to the Association of International Retail (AIR).
The numbers underscore arguments that a lack of a tax rebate for tourists has held back Britain’s recovery from the pandemic.
In comparison, Spain’s levels of Chinese visitor numbers were 121 per cent of their pre-Covid levels.
Department stores, including Harrods, have been impacted by a downturn in tourist spending
Instead of spending money in Britain, tourists are flocking to Paris, Milan and Berlin, leaving these economies to reap the rewards at the UK’s expense.
The Mail has been campaigning for the Government to ‘Scrap the Tourist Tax’ to help boost all avenues of the visitor economy – from factories producing luxury goods to tearooms in countryside tourist hotspots.
More than 500 firms have backed the campaign.
Big names, including Giorgio Armani, Pernod Ricard and the owner of the Westfield shopping centres, all argue that the cost of these refunds is outweighed by the enormous benefits of encouraging more visitors to Britain.
Derrick Hardman, chairman of the Association of International Retail, said: ‘This is yet more evidence that the UK has shot itself in the foot by scrapping tax-free shopping for international visitors.
‘VisitBritain states that shopping is the number one priority for Chinese travellers, yet we have made ourselves a significantly less attractive place to come and spend.
‘This isn’t just hitting retailers, but everyone involved in the tourist economy — hotels, restaurants, pubs, visitor attractions, transport and so on.
‘All we are asking for is that the Government agrees to a proper review of the impact across the economy of ending tax-free shopping. Any government serious about jobs and growth would agree to look at this.’
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