Retail / news
UK Conservatives Pledge Return of Tourist Tax-Free Shopping, but Airports Left Out
The UK's opposition Conservative Party has pledged to bring back tax-free shopping for overseas visitors if it returns to government, reversing the 2021 abolition of the VAT Retail Export Scheme. The plan stops short of restoring tax-free sales at UK airports.
Under the proposal, VAT refunds would be reinstated for eligible visitors from outside the European Union, undoing the removal of the VAT Retail Export Scheme. The party said the scheme could later be widened to EU visitors by the end of the next Parliament if evidence shows it pays its way.
The carve-out for airports is significant for the travel retail sector. The changes introduced in January 2021 removed the VAT Retail Export Scheme in Great Britain and also ended tax-free airport sales across categories including beauty, fashion, luxury goods and consumer technology. Duty-free sales of liquor and tobacco were left in place.
The Conservatives currently hold 118 seats, compared with 403 for the governing Labour Party, making the pledge a policy position rather than an immediate change in the rules.
Announcing the plan, Conservative Party leader Kemi 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."
The distinction between high-street and airport relief has drawn attention from travel retail operators, which have seen airport shopping affected by the 2021 changes alongside the broader removal of visitor VAT refunds.