Westfield exec makes fresh calls to scrap tourist tax ahead of Autumn Statement
The chief operating officer for Westfield Group, Scott Parsons, has said that benefits of reinstating the tourist tax would have a “ripple effect” on the whole of London’s economy.
Parsons, who heads up operations for two popular London shopping centres, told City PM there is a “genuine risk” international visitors could shun London in favour of more competitive European retail destinations over the vital Christmas period.
He said: “While we’re seeing luxury brands continuing to invest in our centres, tourist numbers almost on par with pre-Covid levels, and spending up, the lack of tax-free shopping is without doubt a blocker for certain markets where we’ve seen declines such as Middle Eastern shoppers.”
Westfield has two locations in Stratford and White City, and is home to both a number of luxury and high street brands.
Parsons joins a host of other retail and business groups, who have in recent months been ramping up calls to the government to bring back tax free shopping for international tourists.
The government ditched the VAT refund for tourists in 2021 when Prime Minister Rishi Sunak was Chancellor.
Since then businesses have argued that wealthy foreign shoppers are now choosing the likes of Paris and Milan when travelling for shopping holidays.
The issue was debated in parliament but the government is yet to make a formal decision on whether or not to bring the scheme back.
Parsons added: “The axing of tax-free shopping in 2020 was another blow for the British High Street and the retail industry with British retailers losing £1.5bn in sales last year not to mention the move actually costing the Exchequer £10.7bn each year.”
His message comes ahead of the Autumn Statement tomorrow with retailers hoping Chancellor Jeremy Hunt will show some support for the sector, particularly in the form of continued business rates relief.
The Westfield leader said that reducing business rates would help level the playing field between physical and online retailers “once and for all.”
“This starts with reducing business rates, which remain the single biggest challenge our industry faces,” he explained.
“To put it into perspective, our system sees UK retailers paying around ten times more in business rates than cities across the continent, meaning London is at a huge disadvantage compared with cities like Paris, Milan and Barcelona.”
Business rates are a tax on property used for business purposes such as pubs and shops.
The government has frozen rates for the past three years in light of the pandemic and subsequent economic fall out.
An HM Treasury spokesperson said: “VAT-free shopping does not directly benefit Brits – it lets foreign tourists who buy items in the UK claim back VAT as they return home.
“The scheme could cost British taxpayers around £2 billion a year, which is money we would need to find elsewhere to help fund. Furthermore, fewer than one in ten non-EU visitors used the previous scheme, showing it’s not a significant attraction for tourists.”