Heathrow Duty Free Blackjack
Heathrow Airport today demanded an end to the Rishi Sunak’s “disastrous' tourist tax on long haul travellers as it reported on an 88% crash in passenger numbers last month.
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The airport called for targeted support of the airport sector to protect jobs and help drive the economic recovery.
It said: “These include full business rates relief for all UK airports and abandoning the disastrous tourist tax which will make the UK the only country in Europe not to offer tax-free shopping for international visitors.”
He warned the tourist tax would result in 2000 job losses at Heathrow shops alone.
Heathrow Airport Duty Free Shop
The Evening Standard has been campaigning for the government to repeal its surprise decision to scrap decades of duty free allowances on tourists from outside the EU in the hope of raising £500 million of extra VAT income.
The net effect of the move, after accounting for the expected cancellation of visits and shopping trips by long haul travellers is expected to be a tax shortfall of £3.4 billion, according to analysts Global Blue.
Total spending in UK shops, hotels and restaurants is expected to fall £6 billion from the move.
Heathrow chief executive John Holland-Kaye said: “2021 should be the year of Britain’s economic recovery. But recent announcements, such as the tourist tax, could be the final nail in the coffin for struggling businesses such as restaurants, hotels and theatres that rely on inbound tourists as well as for retailers.”
He added: “To make ”global Britain' a reality, the government should be helping the aviation sector to survive, to develop routes to our key trading partners, and attract businesses and tourists to come to Britain to spend their money.'
The government argues that the tax, which comes in the form of an abolition of VAT refunds on UK shopping, predominantly helps London and Oxford.
However, MPs and business leaders across the UK in areas from Manchester and York to Scotland have loudly complained it will hit their tourist-dependent businesses as well, from manufacturing to retail.
Total job losses are estimated to be upwards of 40,000 as employers suffer declines in tourist numbers and spending.
Industry is calling on the government to repeal the move, which it has put into parliament as a statutory instrument with barely any parliamentary scrutiny.
Businesses argue the consultation period was deeply flawed, with the drastic proposal meriting only a fleeting mention in a far wider discussion document issued to industry at the height of the Covid pandemic in Spring.
© Provided by Daily Mail MailOnline logoBritain's biggest airport has launched a legal challenge against the decision to end duty-free bargains on perfume, clothing and electronics.
Heathrow argued the move will cost the country billions and will intensify the crisis facing the battered aviation and retail industries.
The Treasury has said that, as of January 1, tax savings on goods bought by outbound holidaymakers and business travellers will apply only to alcohol and tobacco.
© Provided by Daily Mail Britain's biggest airport has launched a legal challenge against the decision to end duty-free bargains on perfume, clothing and electronics (stock image used)Ministers are also abolishing the VAT rebate scheme for tourists as part of the move.
The planned changes will leave the UK as the only country in the developed world to not offer tax-free shopping to travellers.
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The bosses of WHSmith, Boots, Fortnum & Mason and Dixons are among business chiefs opposing the plans, warning it will trigger a £10billion reduction in spending in shops.
And the abolition of the VAT rebate scheme is expected to cost the Exchequer £2billion in lost tax revenue.
Heathrow has now launched a Judicial Review of the Chancellor's decision – the first time it has embarked on a legal challenge against the Government.
In a letter to Rishi Sunak, the airport's boss John Holland-Kaye warned: 'Overnight, what draws many to our shores and has taken decades to build will be lost.'
© Provided by Daily Mail The planned changes will leave the UK as the only country in the developed world to not offer tax-free shopping to travellers (stock image used)The letter, co-signed by the bosses of World Duty Free and tax refund company Global Blue, claimed the plans will cause 'untold damage to UK competitiveness' after Brexit and will put up to 70,000 jobs at risk.
The Treasury said it recognises the 'challenging times facing the aviation sector'.
A spokesman added it decided to end tax-free shopping 'after concerns that the saving wasn't always passed on to consumers, putting the high street at a disadvantage'.