In a policy shift with significant implications for inbound business travel and corporate retail spending, the Conservative Party pledged on 21 September to restore VAT-free shopping for overseas visitors if it wins the next general election. Trade Secretary Kemi Badenoch announced the plan during a visit to Bicester Village, arguing that the 2021 abolition of the Retail Export Scheme had made Britain “less competitive” than Paris or Milan and was costing jobs in hospitality and luxury retail. Industry heavyweights—including Fortnum & Mason, Claridge’s and designer Sir Paul Smith—lined up to endorse the move, saying the absence of tax-free shopping has diverted high-spending tourists to EU destinations where 12–20 per cent refunds remain available. According to VisitBritain, visitor numbers have bounced back to near 2019 levels but spending is still 8 per cent lower in real terms. If implemented, the scheme would allow non-UK residents to claim back VAT on goods taken out of the country via a digital process at airports and Eurostar terminals. Badenoch said the party is also considering extending eligibility to EU tourists, further broadening the market. The Treasury would offset lost revenue by tightening charges for non-resident access to the NHS. For global mobility professionals the promise is noteworthy: recovering VAT can materially reduce the cost of employee relocation shopping trips and client gifting. Corporate travel managers predict that luxury-oriented itineraries—particularly stopovers in London for Middle-Eastern and Asian executives—would become more attractive. Critics, however, questioned the timing, calling the pledge an election gimmick that fails to explain funding for HMRC’s refund processing technology. Labour dismissed the announcement as a “spectacular U-turn”, noting that Badenoch herself defended scrapping the scheme in 2021. Whether or not the policy survives the campaign, the debate has already drawn attention to the broader competitiveness of the UK’s visitor economy.
Source: ITV News
