New research shows the West End of London lost £310 million in potential sales during the first half of the year because of the absence of the tax-free tourist shopping perk that used to attract high-spending visitors to the UK.
Photo: Sandra Halliday
That’s according to representative body the New West End Company (NWEC) with the £310 million figure being 40% higher than the £220 million claimed to have been lost to the key shopping area this time last year.
In fact, since the perk was abolished by the previous government post-Brexit in 2021, the £310 million is the largest estimated half-yearly loss.
NWEC’s estimate, seen by The Times, also said the West End has lost around £1.4 billion in total sales since 2023.
And NWEC’s chief executive Dee Corsi said actions by the current government have piled further pressure on West End businesses. Changes such as higher employer National Insurance contributions have driven up costs and along with the hit from the end of VAT-free shopping means retailers are reviewing their staffing or investment decisions.
With over 80% saying the perk’s abolition had directly damaged their trading performance, 75% of West End businesses are said to be looking at staffing levels and 50% reassessing investment plans.
NWEC’s survey also saw over 90% of businesses in the neighbourhood reporting lower spend and fewer visits from international shoppers with 96% saying customers who might have visited are going to cities like Paris and Milan instead.
“Tax-free shopping presents a rare, low-cost opportunity for the government to back Britain’s near-term growth, create jobs, and give our businesses their competitive edge once more,” Corsi told The Times.
But the government doesn’t look likely to change its approach any time soon. A Treasury spokesperson stressed to the newspaper the strength of the UK tourism sector and said it will be launching a National Visitor Economy Strategy this autumn “to help meet our ambition to welcome 50 million international visitors a year to the UK by 2030”.
They also pointed out that visiting shoppers can still claim VAT relief where the items purchased are shipped directly to their home country as exports. Unfortunately, that fact is lost on most visitors who prefer the convenience of buying something and taking it with them.
