Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether the OBR has reviewed the Treasury’s 2020 forecast of the fiscal impact of extending the VAT RES to EU residents.

The OBR’s estimate is that the withdrawal of the VAT Retail Export Scheme will save the Exchequer around £540 million per year by 2025-26.

The Government has also noted recent external data, which shows that tourism numbers and spending for the UK has recovered at a similar rate following the pandemic to other European economies that offer tax-free shopping

The Government has carefully considered external analysis estimating that a new tax-free shopping scheme would generate more revenue than cost for the Exchequer, as well as supporting data from a wide range of business stakeholders across the UK. However, these do not provide sufficient evidence that a new tax-free shopping scheme would have greater benefits to the UK than costs.

The Government therefore has no plans to introduce a new tax-free shopping scheme in Great Britain.