Badenoch pledges to bring back tax-free shopping for tourists

Kemi Badenoch has pledged to reverse the abolition of the VAT refund scheme brought in under the previous Tory government (Jordan Pettitt/PA) PA Wire Nina Lloyd 2 minutes ago Kemi Badenoch has pledged to bring back tax-free shopping for tourists by reversing a post-Brexit rule change.

The decision to scrap the VAT refund scheme for international visitors in 2021 left the UK “less competitive” than many other European destinations as the country left the EU, the Tories said.

The Opposition leader, who was a Treasury minister at the time of its abolition, said retailers were being “let down by a policy that is driving their customers away.”

Business chiefs including the head of Fortnum & Mason welcomed the pledge (Yui Mok/PA) PA Archive Business chiefs including the bosses of Fortnum & Mason, Paul Smith and the parent company of Claridge’s hotel hailed the policy change as “pro-growth” and “pro-jobs”.

Visitor numbers to the UK have returned to near pre-Covid levels, but real-terms spending remains 8% lower than before the pandemic, according to estimates from tourism agency VisitBritain based on data from 2024.

The Tories said returning the VAT refund would be partly offset by a proposed “crackdown” on so-called “health tourism”, including more consistent charging of patients ineligible for free treatment.

Tax-free shopping could also be extended to cover EU tourists subject to evidence, with the rollout complete by the end of the next Parliament, the party said.

In a joint statement backing the pledge, business leaders said: “As some of the leading businesses in tourism, retail and hospitality, we welcome this pro-growth, pro-jobs announcement from Kemi Badenoch and her team.

The Tories scrapped the VAT refund scheme in 2021 (Stefan Rousseau/PA) PA Wire “With its heritage and the quality of our products and service, Britain is well placed to compete with the world’s finest destinations. The restoration of tax-free shopping for tourists will allow us to win back those who may have taken their custom elsewhere in recent years. When taking the full economic benefits and other taxes paid into account, we believe this will be a net benefit to Britain.”

The business leaders are: chef and TV personality Angela Hartnett; co-founder of Inception hospitality group Charlie Gilkes; chief executive of Me+Em fashion brand Clare Hornby; Burlington Arcade managing director Jamie Reuben; chief executive of Maybourne, which owns and manages The Berkeley, Claridge’s, The Connaught and The Emory hotels, Marc Socker; Paul Smith executive chairman Ewan Venters; Fuller, Smith and Turner executive chairman Simon Emeny; and Fortnum & Mason chief executive Tom Athron.

Mrs Badenoch said: “Britain should be the place where the whole world comes to shop.

“We have iconic retailers, inventive designers and brilliant manufacturers, but they are being let down by a tax policy that is chasing their customers away.