Minister warns 'Tourist Tax' unlikely to be reversed in Spring Budget

27 Feb 2024

The so-called 'Tourist Tax' is unlikely to be reversed in the Spring Budget, Nigel Huddleston, Financial Secretary to the Treasury, has warned.

Eradicating the tax would allow international visitors to shop in the UK tax-free. However, Mr Huddleston emphasised the complexity associated with removing the tax, and highlighted challenging legislative hurdles involved with abolishing the tourist tax and introducing an alternative.

Huddleston, sad it was 'not possible to introduce the same system as before, given that it would now need to be open to visitors from the EU as well as the rest of the world'. 

He added: 'Any new scheme, no matter the design, would take time to legislate for and implement in order to prevent non-compliance risks and ensure operation.'

Business groups, such as the British Chambers of Commerce (BCC), have urged Chancellor Jeremy Hunt to use the Budget to ditch the Tourist Tax.

Shevaun Haviland, Director General of the BCC, recently said: 'It was great to be at Heathrow . . . to hear how a new internationally competitive tax-free shopping scheme would turbocharge Britain's economy, helping retailers and hospitality venues across the country.'

The BCC estimates that the tax costs the British retail sector £1.5 billion per year and adversely affects the UK tourism and hospitality sector.