US visitors shun London shops and spend their cash in other European cities because of the tourist tax, data finds

• The UK’s tourist tax is putting American visitors off spending in London

American visitors are spending less in London and splashing their cash in other European cities because of the tourist tax, fresh data has found.

Tourists are not spending as much money in the capital due to Rishi Sunak’s decision to remove a VAT-free shopping scheme for holidaymakers in 2021.

Research from the New West End Company, which represents hundreds of companies in the shopping destination, lays bare the damage the hated levy is causing to the economy.

Spending from American tourists has flatlined, with the total spent in the three months to June at 1 per cent below 2019 levels. This comes despite a 17 per cent increase in flight bookings to London from the US over the same period.

The UK’s struggle to rebound after the pandemic comes as American spending has increased by 183 per cent in France and 174 per cent in Spain, compared with 2019.

Tourists are not spending as much money in the capital due to Rishi Sunak’s decision to remove a VAT-free shopping scheme for holidaymakers in 2021 (Pictured: Covent Garden)

More than 300 business leaders are backing The Mail’s Scrap The Tourist Tax campaign, and have urged Chancellor Jeremy Hunt to scrap the economically harmful policy (Pictured: Oxford Street)

Tourists from the Middle East – including Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain and Oman – have been also spending even less in London, with figures down 17 per cent on 2019.

More than 300 business leaders are backing The Mail’s Scrap The Tourist Tax campaign, and have urged Chancellor Jeremy Hunt to scrap the economically harmful policy. Signatories include Burberry and Mulberry, Harrods, Heathrow airport and Marks & Spencer.

The boss of Watches of Switzerland, Brian Duffy, said tourist footfall in London had not returned to pre-2019 levels and it was ‘not going to happen’ without the VAT-free scheme.

Mr Duffy said: ‘A lot of tourists are visiting the UK, London and also elsewhere, but they are shopping a lot less. It’s just a matter of fact.

‘I was in Florence and it is full of Americans shopping – there is a visually obvious plus. No question. Tourists, particularly Americans and those from the Middle East, are visiting Europe and shopping big time.’ The latest figures also underscore business chiefs’ pleas that the UK is set to miss out on pent-up demand from affluent Chinese tourists, who are finally able to travel again after the scrapping of lockdown curbs.

Helena Beard, of UKinbound and Chinese tourism agency Guanxi, said the tourist tax would affect how much Chinese visitors spent here. ‘The UK is going to see the effects of no VAT-free shopping as revenue will go down, especially at the luxury end,’ she said.

‘When people travel to Europe to buy designer goods, they won’t buy here, they’ll wait until they get to France or Italy.’

Earlier this summer, Treasury officials requested new evidence of the ‘wider economic impact’ of the scheme.

Source: Read Full Article