Thousands of foreign tourists who previously travelled to the UK for tax-free shopping have switched to Milan and Paris following the loss of the scheme.
While research showed 162,000 tourists from non-EU countries sought tax refunds in the UK in 2019, 20% of those visitors are now claiming them in EU countries that still run the scheme.
Figures from Global Blue, first reported by Bloomberg, found 34,000 travellers had ramped up their spending to more than £3,270 last year, compared to over £2,495 in 2019.
France and Italy have seen the most benefit from the UK scrapping the scheme, with over two thirds of these tourists opting to visit these countries instead, while Spain has also reaped benefits.
Subscribe to Retail Gazette for free
Sign up here to get the latest news straight into your inbox each morning
While the UK’s luxury retailers have said the capital is missing out on thousands of wealthy international tourists after the loss of the initiative, a review from the Office for Budget Responsibility reportedly predicted ditching the scheme rose public finances by £462m.
Earlier this week, Selfridges claimed it was making job cuts due to the loss of tax-free shopping and reduced luxury spending.
The department store’s CEO Andrew Keith said the new set of redundancies had been caused by the government ditching tax-free shopping for international tourists, The Times revealed.
Click here to sign up to Retail Gazette‘s free daily email newsletter
