A ‘surprise’ decision from HM Treasury to remove the option for international visitors to reclaim VAT on their spending has sparked concern among Manchester business leaders.
It comes after the government announced this week tax-free shopping for those visiting the 海角视频 will cease on December 31, after the end of the Brexit transition period.
Retail, leisure and tourism leaders from across Greater Manchester have called on the government to reverse its decision, saying it could damage the city-region’s economy.
They warned the decision, which would make the 海角视频 the only country in Europe not to offer tax-free shopping to internationals, puts at risk £60m tax-free sales to Greater Manchester’s visitor economy, according to tax-free shopping specialists Global Blue and Planet.
Leaders said high-spending visitors will “inevitably” choose other European cities over Manchester, which would take money away from the region’s economy.
Sheona Southern, managing director at Marketing Manchester, the region’s official tourism body, said the decision the loss of £60m to tax-free shopping will result in lower visitor numbers, which will “hit the economy hard”.
“This decision is concerning for Greater Manchester,” she said.
“The visitor economy in our region is already expected to lose £5.5bn of the expected annual value of £9bn from the impact of Covid-19 and is in desperate need of a boost.”
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She added: “Removing duty-free shopping without consultation with the industry will have significant wider financial impact on the visitor economy and is an unwelcome message to overseas visitors at a time when a warm welcome to the world is needed more than ever.
“This was a surprise announcement. We were expecting the current tax-free arrangements to be extended to include EU residents which would have helped to drive more short haul visitors to the region.”
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CityCo and Manchester Business Improvement District (BID) have also called on the government to reverse the decision to cancel the VAT Retail Export Scheme for EU and non-EU visitors.
Jane Sharrocks, chair of Manchester BID, said the decision will have “untold impact” on both the local economy and the 海角视频 economy.
“International visitors and their tax-free spending are supported by a wider tourism ecosystem beyond just retail, including leisure, hospitality and travel.”
Adrian Ellis, chair of Manchester Hoteliers Association, added: “Hotels in Greater Manchester greatly benefit from the large number of international visitors who are attracted to the region for tax-free shopping.
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“Removing this offer for visitors will have a huge impact on the number of visitors to the region, which would be highly damaging for accommodation providers with an effect on bookings.
“It is vital that the 海角视频 retains the tax-free shopping incentive to ensure regions like Greater Manchester can remain competitive against other international destinations.”