UK retail and luxury groups have urged Chancellor Rachel Reeves to reinstate tax-free shopping for international visitors, citing negative impacts from US tariffs on their competitiveness. In a joint letter, leading trade organizations argue that restoring VAT-free shopping is essential for business viability and economic growth. Since the cancellation of the scheme post-Brexit in 2021, British luxury companies have experienced diminished demand from American consumers, who now favor purchasing abroad where tax incentives still exist, leading to increased economic strain and missed opportunities for UK businesses.
US tariffs will negatively impact our businesses' profitability. We are considering how we, as associations, and the UK government could best support businesses at this time.
Restoring VAT-free shopping is not a luxury, but a proven growth strategy needed to help the UK economy weather worsening global trade disruption.
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