Nandy opens door to scrapping retail tourist tax
A Cabinet minister has opened the door to scrapping Britain's tourist tax on retailers.
Lisa Nandy, the Culture Secretary, said she had heard 'very loud and clear' calls from figures in the fashion industry to bring back VAT-free shopping for overseas visitors.
The decision to axe tax-free shopping for tourists was taken by Rishi Sunak, then the chancellor, in the wake of Brexit, prompting an outcry from the retail sector.
Ms Nandy said bringing back VAT-free shopping was not being actively considered, but added that the Government would be 'happy to look at the evidence'.
In an interview with Elle magazine, she said: 'I've heard very loud and clear the calls from the fashion industry to [reintroduce it].
'My understanding is it was scrapped by the previous government because it had limited economic value. But we're always happy to look at the evidence around these things… If it is a benefit, it's something that we'll explore, but at the moment, that's not something we're proposing to do.'
Any tax decisions are ultimately up to the Treasury and Rachel Reeves, the Chancellor, and would be announced at a fiscal event.
Retail figures have been urging the Government to bring back VAT-free shopping since it was scrapped in 2021.
Last year, the Centre for Economics and Business Research found that it costs Britain £11.1 billion in lost GDP every year and deters two million people from visiting the country.
Countries that offer tax-free shopping for tourists include France, Spain and Ireland, as well as countries in Asia and South America.
Last October, Ms Reeves was urged to scrap the tourist tax in the Budget, with more than 300 chief executives warning her it was putting Britain at a 'massive global disadvantage'.
Under the Conservatives, the Treasury argued that reintroducing tax-free shopping cost could £2 billion a year and did not 'directly benefit' British people.
Prominent figures in British fashion who have called for it to be reintroduced include Caroline Rush, the head of the British Fashion Council, and designers Anya Hindmarch and Sir Paul Smith.
Ms Nandy told Elle that she wanted to encourage 'the best talent' to enter the sector and remain in the UK, adding: 'I've got that young Paul Smith in mind. I want to know how that working-class lad growing up in Beeston can become the Paul Smith of the future. And if we can crack all those things, I'll be happy.'
She also revealed fashion choices made by her younger self, telling the magazine: 'I used to go clubbing in Manchester in my dungarees with my Calvin Kleins poking out and I thought I looked tremendous. I look back now and think, thank God we didn't have cameras on phones, because there's very little photographic evidence.'
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