Tourism: VAT
The question
To ask the Chancellor of the Exchequer, whether she plans to introduce tax free shopping in tourist destinations.
Answered by James Murray
Earlier this year, the Office for Budget Responsibility conducted a review of the previous government’s 2020 costing of removing tax-free shopping for tourists. The OBR’s updated estimate is that the withdrawal of the VAT Retail Export Scheme will lead to a saving for the Exchequer of around £540 million by 2025-26 (compared to £460 million when originally costed in 2020).
The Government has inherited a challenging fiscal position. Debt is near 100% of GDP and borrowing is more than double what it was before the pandemic. In addition to this, a recent Treasury audit has revealed an additional £21.9 billion pressure on departmental spending.
The Chancellor has confirmed that she will be making decisions on tax policy, in this context, at the Budget on 30 October.
Verbatim has judged this answer against the question that was actually asked — answered, partly answered, or evaded. Sign in to see the verdict →