Walpole, the official sector body for UK luxury, recently called for the reintroduction of the Value-Added Tax Retail Export Scheme (VAT RES), which, it feels, can result in direct retail sales of at least £1.2 billion. The VAT RES rules enable non-European Union (EU) visitors to the United Kingdom to purchase eligible goods and either avoid or claim a rebate on UK VAT charged on those purchases.

By reintroducing the VAT RES or a similar scheme, the UK stands to attract 600,000 additional visitors annually. Walpole includes Harrods, Claridge’s and Burberry among its members.

Close to 250 luxury brands called on the government to reintroduce tax-free shopping to ensure that the UK’s economic recovery matches its European counterparts.

This is alongside demands to introduce a smoother tourist visa scheme, which, they state, would help the country’s post-pandemic tourism economy match that of France, Italy and other EU countries, all of which are returning to pre-pandemic levels at a much faster rate.

The suggestions were part of Walpole’s new tourist report, ‘What It’s Worth: Enabling The Return of the £30bn High-End Tourism Sector,’ which highlights the value of high-end tourism to the UK economy and the need for government action to allow the UK to be prosperous.

High-end tourism in the country was worth £30 billion in 2019, said Walpole, but the United Kingdom is struggling to recover to pre-pandemic levels. The trade body attributes that to the government decision to abandon the tax-free shopping scheme in 2020, which it estimates has resulted in a 38 per cent drop in retail sales to non-EU visitors.

The report outlines the role that tourism played in Britain’s economy pre-pandemic, sharing that tourism, both domestic and international combined, contributed to 4 per cent of gross domestic product and had an overall value of £85 billion, of which, £30 billion was attributed to ‘high end tourism,’ defined as those who stay in luxury accommodation.

These high-end visitors typically spend 14 times more than the average visitor, adds Wimpole. With £1 spent by those in high-end accommodation in the UK generates £8 of value in other industries, such as culture, entertainment and luxury shopping, which in turn supports the 160,000 jobs across the UK luxury sector.

Walpole added that the UK’s visitor visa has fallen behind that of Schengen, making Britain a less attractive destination and the UK’s Electronic Visa Waiver Scheme for incoming tourists has made the UK a ‘less accessible’ destination compared to EU countries.

Fibre2Fashion News Desk (DS)

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