Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the merits of reintroducing VAT-free shopping for overseas visitors.

The Government has no plans to introduce a new tax-free shopping scheme in Great Britain. Visitors to Great Britain can continue to claim VAT relief where the items purchased are shipped directly to their home country as exports.

In March 2024, the Office for Budget Responsibility (OBR) conducted a review of the previous Government’s 2020 costing of removing tax-free shopping. The OBR’s updated estimate is that the withdrawal of the VAT Retail Export Scheme will save the Exchequer around £540 million per year by 2025-26. Reintroducing tax-free shopping would therefore likely come at significant cost to the Exchequer.
 
The Government has also noted recent ONS 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.