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Ending VAT-free shopping is another blow to UK fashion and textiles


The UK Fashion and Textile Association (UKFT) is urging the Government to reverse its decision to end VAT-free shopping to protect UK jobs and retail sales.

Under the VAT Retail Export Scheme (VAT RES), international visitors can currently reclaim the VAT they pay on goods bought in UK shops that they take home in their luggage. The Government has announced it will end the scheme for visitors from all countries in the UK on 31 December 2020.

Adam Mansell, CEO of UKFT, said; “This move is another blow to the UK fashion and textile industry, and our exporters. We fail to see the logic behind this decision at a time when we need to be doing everything we can do to increase sales. The Government seems to have lost sight of the importance of exporting, whether that’s through encouraging overseas visitors to the UK or UK companies attending overseas tradeshows.”

UKFT has written to the Chancellor of the Exchequer demanding that this decision is reversed.

Ian Maclean, Managing Director of John Smedley and UKFT board member, said: “This is the worst possible timing for a decision like this. Luxury retailing is unprecedentedly tough and the effect on our business will be terrible when we still haven’t been able to sort out how we are going to get through this time. We urge the Government to reverse this decision.”

Simon Cotton, CEO of Johnstons of Elgin and UKFT board member, said: “The end of tax free shopping in the United Kingdom is devastating news for retailers already hit hard by the pandemic and the loss of international travellers.  Over 50% of our city centre sales are currently tax free and over 33% of our retail sales across the UK as a whole. We know these travellers will now move to other countries making British brands and manufacturers much poorer and ultimately reducing the total revenues to the treasury. We very much hope to see a reversal of this decision which is hugely damaging to the United Kingdom economy at a time when we need all the help we can get.”

UKFT is also urging the government to allow Tradeshow Access Programme grants to be used for virtual tradeshows, after many key events for the UK fashion and textile industry have moved online. Read more here.

Read the UKFT Response to the Bounceback Plan for Exports here.