Boris Johnson shows why he’s bad for business, jobs and the economy – Angus Robertson

The UK Government’s decision to abolish tax-free shopping for tourists will hit Edinburgh particularly hard, writes Angus Robertson.

Tuesday, 22nd September 2020, 7:30 am
Visitors will no longer be able to reclaim the VAT on their purchases (Picture: Jeff J Mitchell/Getty Images)

Edinburgh retail outlets face losing up to £92 million and 1,840 jobs are being put at risk, not by the coronavirus pandemic, but by the UK Government’s abolition of tax-free shopping for tourists.

From 1 January 2021, visitors to the Scottish capital will no longer be incentivised to spend in the city’s shops. Given that 20 per cent of all international buying outside London takes place in Edinburgh this will have a disproportionate impact on the city’s economy and hinder its recovery.

At present the VAT Retail Export Scheme allows international visitors to reclaim the VAT paid on goods purchased, which are not consumed in the UK.

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With tax often immediately reimbursed on to credit cards and not at the airport on departure, many tourists are actually incentivised to spend more while still in the country.

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The take-up of tax-free shopping underlines the attraction of Edinburgh to international visitors. According to the Association of International Retail, nearly a fifth of the £22bn spent in UK by international tourists was in Edinburgh.

For some retailers, a very high percentage of their sales are by visitors reclaiming tax. In the case of Johnston’s of Elgin on Multrees Walk off St Andrew’s Square, it is a whopping 33 per cent.

Not only is Edinburgh facing the damaging economic prospect of Brexit and the ongoing challenge from coronavirus but now this additional blow to the retail sector by the UK Government. Boris is bad for business, jobs and the economy.

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