The clock is ticking for tax-free shopping in the UK as tourists face an impending rule change that will impact how they can claim back VAT on their purchases. The recent ruling by the High Court means that come the New Year, tourists will no longer be able to enjoy tax-free shopping at the airport unless they choose to ship their goods home at the time of purchase.
This shift in policy has raised alarms among retailers, travel sectors, and other stakeholders who fear the ripple effects of the decision. Major players like Heathrow airport, World Duty Free Group, and Global Blue have all voiced their concerns over the potential fallout. Heathrow Airport, in particular, is pushing for a judicial review in an effort to overturn the court’s dismissal of the appeal.
While the government insists that the changes are necessary to adhere to international standards, the move makes the UK the sole European country to eliminate tax-free shopping for tourists. This has not gone down well with retail companies, who predict that as many as 46,000 jobs could be in jeopardy due to the new regulations.
Critics of the decision argue that the consultation process leading up to the rule change was flawed and failed to take into account relevant considerations. Despite the government’s claims about a consultation held earlier in the year, many retailers believe that their concerns were disregarded and that the existing tax-free shopping provisions could have been extended to EU visitors.
Starting from January 1, non-EU tourists will only be able to benefit from VAT-free shopping if they choose the ship home option. On the other hand, EU visitors can still enjoy tax-free shopping by selecting the shipping alternative rather than carrying their purchases in their luggage. With the deadline looming, the future of tax-free shopping in the UK remains uncertain, with potentially far-reaching economic implications on the horizon.
Follow these links for more information on the topic: BBC News, CNBC.
