UK Luxury retailers want to reinstate Duty Free shopping
As part of the Brexit agreement in January 2020, UK eliminated duty-free shopping for overseas visitors, which allowed shoppers to reclaim 20% VAT on goods as they left the UK.
It means shopping in the EU is 20% cheaper than in the UK. British shoppers started hopping over to cities in Europe to shop for luxury goods and tack advantage of the VAT savings.
VAT rebates were set to be reintroduced by the short-lived government as a way of stimulating the economy, but the idea was abandoned by Rishi Sunak when he took office. A Treasury spokesperson responded this week: “Introducing a wide-ranging VAT-free shopping scheme would come at too high of a cost, as has been supported by previous estimates from the Office for Budget Responsibility.”
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