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Written Question
Duty Free Allowances
Tuesday 7th March 2023

Asked by: Earl of Liverpool (Conservative - Excepted Hereditary)

Question to the HM Treasury:

To ask His Majesty's Government whether they will carry out a detailed cost-benefit analysis of tax-free shopping which also takes account of the potential benefits to the wider economy of removing such taxes.

Answered by Baroness Penn

The independent Office for Budget Responsibility (OBR) published their assessment of the withdrawal of the previous VAT-free shopping schemes in November 2020. This showed that the withdrawal of VAT-free shopping would raise a significant amount of revenue and have a limited behavioural effect on decisions to visit, or spend, in the UK. The Treasury remains confident in the OBR’s analysis.