Supportive figurehead in cosmetics industry voices approval for tourist levy initiative
Impact of Tourist Tax and End of VAT-Free Shopping on UK Retailers
A recent development has seen UK retailers grappling with the consequences of the tourist tax and the abolition of VAT-free shopping for tourists. This change has been causing concern among businesses, particularly in the health and beauty sectors, as it is believed to be driving rich Americans to shun London.
One retailer feeling the brunt of these changes is Deborah Mitchell, the boss of Heaven Health & Beauty. Mitchell's company, along with 500 others, has joined a campaign to scrap the tourist tax and reinstate VAT-free shopping for visitors. Mitchell stated that scrapping the tourist tax would help boost retailers' profits due to recent tax hikes, such as higher wages and National Insurance contributions.
Heaven Health & Beauty offers a range of products, including nettle and bee 'venom' as anti-ageing Botox alternatives. The company also provides DIY investing platforms, specifically AJ Bell, as an option for its customers.
The tourist tax is a subject of concern for many businesses, as it is believed to be driving tourists away. According to related articles, the tax is causing a significant drop in spending by EU and non-EU tourists, leading to reduced retail sales and an overall hit to the visitor economy.
The Association of International Retail estimates that reinstating VAT-free shopping could generate an additional £3.65 billion in EU tourist spending and £1.5 billion in non-EU visitor spending lost since the scheme’s end in 2021. UK retailers feel disadvantaged compared to countries like France and Spain, which continue to offer tax-free shopping to tourists, causing some shoppers to go elsewhere.
The loss in tourist spending affects not just retailers but also hotels, restaurants, galleries, and other parts of the tourism industry that interact with visitors. Industry groups and major retailers have called on Chancellor Rachel Reeves to reinstate tax-free shopping to boost the retail and tourism economy, but fiscal constraints and government reluctance reduce the chances of change in the near term.
InvestEngine, Trading 212, and Interactive investor are among the other investing platforms mentioned in the article as options available to businesses and individuals. Hargreaves Lansdown is another platform that has been mentioned in the context of investing.
For more information about these platforms, please refer to the links provided in the article. It is clear that the impact of the tourist tax and the end of VAT-free shopping is being felt across the UK retail sector, with smaller retailers like Heaven Health & Beauty likely sharing in these negative effects as part of the wider visitor economy decline.
[1] The Guardian: "UK retailers call for tourist tax to be scrapped to boost economy" [2] The Telegraph: "Chancellor urged to abolish tourist tax to boost economy" [3] Evening Standard: "Tourist tax is driving rich Americans to shun London, businesses claim" [4] BBC News: "Impact of tourist tax and end of VAT-free shopping on UK retailers" [5] GOV.UK: "Electronic Travel Authorisation (ETA) surcharge for visitors"
- Deborah Mitchell, the head of Heaven Health & Beauty, which offers a variety of products including anti-ageing Botox alternatives and investing platforms like AJ Bell, is concerned about the impact of the tourist tax on her business.
- The tourist tax, coupled with the end of VAT-free shopping, has led to a drop in spending by EU and non-EU tourists, affecting not just retailers but also hotels, restaurants, galleries, and other parts of the tourism industry.
- In an attempt to boost the retail and tourism economy, industry groups and major retailers have called for the reinstatement of tax-free shopping, and investing platforms like InvestEngine, Trading 212, Interactive investor, and Hargreaves Lansdown are among the options available to businesses and individuals looking to manage their personal finance.
