Reverse damage to economy by restoring shopping incentive for tourists, urge Scotland’s business community

28 Feb 2024

Representatives of Scotland’s business community have joined forces to call on the Chancellor to restore a tax-free shopping incentive for international tourists. The campaign, led by the Scottish Chambers of Commerce (SCC) and the Federation of Small Businesses Scotland (FSB Scotland), seeks to:

• Level the playing field as other countries such as France see visitor spending recover faster than the UK;
• Reverse the economic damage as shops lose out on £1.5bn a year as non-EU visitors take spend elsewhere; and
• Work with the Chancellor to introduce a competitive scheme which could boost the economy by £10bn.

Dr Liz Cameron CBE, Director & Chief Executive, Scottish Chambers of Commerce, said: “The Chancellor has a clear opportunity to show the United Kingdom is open for business. It is now indisputable that the removal of tax-free shopping has damaged UK’s retail offering and has disincentivised international tourists from spending whilst in the UK. Our European competitors are providing a more competitive offering for visitors and are seeing visitor spending recovering much faster than the UK. We cannot be left trailing behind and this policy must be restored.

“By introducing a new internationally competitive tax-free shopping scheme, the Chancellor can help industry to turbocharge our retail offering for international visitors, revive our high streets, boost economic growth and generate tax revenues.”

Colin Borland, Director of Devolved Nations, FSB Scotland, said: “Introducing tax-free shopping would be like switching on a huge, neon “welcome” sign for British business. After years of turmoil, small firms across the UK are looking for reasons to be positive, and a £10bn benefit to the economy from a new tax-free shopping scheme, expanded to include the EU, would be a game-changer.

“With the Spring budget just a couple of weeks away, small firms in retail, hospitality and the supply chain across the regions and nations will be looking to the Chancellor for a bold move like this – more visitors, more spend, more growth and prosperity, more jobs and more consequential tax revenues for HM Treasury.”

Fraser Brown, Retail Director, Heathrow said: "Heathrow serves seven destinations across Scotland, facilitating trade, inward investment and tourism to some of the most remote parts of the country.

“The UK being the only country in Europe not to offer a proper tax-free shopping incentive means that although tourists are visiting, they are not spending. Iconic Scottish brands like Johnstons of Elgin are out of pocket as tourists are choosing to spend in Paris and Milan where goods are up to 20% cheaper, rather than in Edinburgh or London.

“Businesses big and small from across the country are clear, there can be no more delay. The Chancellor must act at the Spring Budget to level the playing field and introduce a new, competitive tax-free shopping scheme for international visitors.”

CLICK HERE to view the letter.