Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether his Department has made an assessment of the potential merits of developing mitigations to help support businesses in the context of the removal of the VAT-free shopping scheme and commitments made in the Tourism Recovery Plan Update.

The Chancellor has been clear that being responsible with the public finances is a priority. Government analysis done in 2022, which took increased tourist spending into account, found that introducing worldwide VAT-free shopping would come at a fiscal cost of around £2 billion each year.

The Government engaged with varied stakeholders and produced analysis on the cost of VAT-free shopping before withdrawing the previous scheme, and the OBR’s assessment of the previous VAT Retail Export Scheme showed that its withdrawal would have a limited behavioural effect on decisions to visit, or spend, in the UK.