West End loses out on £640m in sales due to tourist tax, NWEC says
According to NWEC, domestic spending also fell by 2.2% year-on-year in the last two months of 2024
West End retailers have reportedly lost around £640m in sales last year due to the lack of tax-free shopping for international tourists, according to New West End Company research.
The losses rose by 60% last year from £400m in unrealised sales in 2023, and impacted some 600 businesses in the London district.
According to NWEC, domestic spending also fell by 2.2% year-on-year in the last two months of 2024.
Data from Global Blue revealed that store sales in Europe had a 16% year-on-year sales rise in November and a 20% rise in December.
In comparison, West End holiday shopping by international tourists – particularly from the US, Saudi Arabia and Germany – only increased by 3.5% in 2024.
NWEC attributed this huge difference in growth to the fact that European countries benefit from tax-free shopping, which means that travellers can claim up to 20% tax relief on spending.
Dee Corsi, CEO of New West End Company, said: “International visitors are eager to spend, at a time when domestic spend is declining, but without a robust tourism strategy, we are losing out to our European competitors – to the tune of £640m in a year.
“The government has just announced support for Heathrow’s third runway. And yet policies like lack of tax-free shopping remain stumbling blocks in their growth agenda.”
He added: “We need bold action to unlock the full potential of international spending, if we are to recover to pre-pandemic levels and achieve growth.”
In January 2021, then-chancellor Rishi Sunak abolished the UK’s tax-free shopping scheme, which had enabled international visitors to claim a 20% VAT refund on their purchases.
