More than 300 retailers have warned chancellor Philip Hammond that the government could lose international competitiveness post-Brexit if it fails to modernise the tax-free shopping system.
In a letter to the chancellor organised by the New West End Company (NWEC), major retailers including Harrods, Fortnum & mason and Bicester Village said confidence in the government’s plan to digitalise tax free shopping has been lost.
The letter said the slow progression of the move away from what the NWEC considers to be a “dated” paper system will deter foreign visitors. It adds that the chancellor should act to “avoid further risks and uncertainty”.
According to the NWEC, tax free shopping is a key tourist perk which contributes approximately £2.5bn of retail sales in the UK per year.
The letter states: “As retailers responsible for virtually the entire UK tax free shopping industry we ask, as a matter of urgency, that the government takes action to introduce a digital system at the earliest possible moment.
”We have lost confidence in HMRC’s ability to deliver its preferred option, which we believe is unnecessarily ambitious, will create an inferior product, will introduce additional risks and uncertainty, and will see the UK diverging from the global norms for tax free shopping schemes.”
“The paper based system is at breaking point, inconveniencing international shoppers, damaging the UK’s reputation, encouraging fraud and putting undue pressure on Border Force.
”It will not be able to cope with expected growth in international tourist numbers. It will be unworkable should the government decide to extend the tax free shopping scheme to visitors from EU member states after Brexit to retain competitiveness with the EU.”