Government should provide cost benefit analysis of tax-free shopping changes

The Treasury committee is asking the government to provide the cost benefit analysis behind the decisions to end the VAT retail export scheme and restrict duty-free purchases other than for alcohol and tobacco from next January.

The committee heard evidence on the likely effect of terminating the VAT retail export scheme which allows non-EU visitors to the UK to claim a VAT refund from customs when leaving the country. Witnesses said that by in effect abolishing tax-free shopping for non-EU visitors to the UK fewer high-value tourists are likely to visit the UK from places such as America China and the Middle East.

After a recent evidence session which considered these issues committee chair Mel Stride wrote to the chancellor asking for an explanation of the changes.

Mr Stride said: ‘The committee has been told that this will be a major...