LEADING Scottish business organisations have joined forced to demand a rethink of UK Government plans to scrap tax-free shopping for international visitors.
They have written to Scottish Secretary Alister Jack voicing their “alarm” at the move.
The UK Government announced last month that tax-free shopping would end on January 1. It allows travellers from overseas to reclaim the VAT paid on goods purchased in the UK but not consumed here.
The National reported that the change could cost Edinburgh alone £90 million and more than 1800 jobs, according to the recently formed Association of International Retail (AIR) The letter to Jack is signed by the heads of Essential Edinburgh, the Scottish Chambers of Commerce, the Scottish Council for Development & Industry, the Scottish Retail Consortium, the Scottish Tourism Alliance and UK Hospitality in Scotland.
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It says: “Dear Secretary of State, we are writing to express our alarm at the UK Government’s abrupt decision to end the VAT Retail Export Scheme (commonly known as tax-free shopping) for international visitors to Scotland on January 1, 2021.
“We are similarly concerned at the withdrawal of the airside tax-free concession on the sale of non-excise goods at ports and airports. Visitors to Scotland from the USA, China and other international destinations make a valuable contribution to our economy including through the purchase of goods and through holidaying here.
“This tax-free shopping and visits by international visitors generates much needed jobs and revenues in the retail, tourism, hospitality and leisure sectors in Scotland, and which will be even more important as these industries seek to recover over the next couple of years from the distress of the Covid-induced recession.
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“Furthermore, we understand the UK will be the only country in Europe not to operate a tax-free shopping scheme to aid tourism if it ends. There is good reason no other European nation has taken this self-inflicted step, and so we ask that you and UK Ministers rethink this decision or at least postpone it until a more rounded assessment is undertaken and discussions are held with industry on possible.”
David Lonsdale, director of the Scottish Retail Consortium, added: “This a clear and unequivocal message – from a formidable cross-section of Scottish industry – voicing serious doubts about the wisdom of scrapping tax-free shopping for international tourists. The UK Government needs to reconsider its retrograde decision which risks hampering the economic recovery.”
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