The UK Government has announced that it will end tax-free sales and shopping on 31 December this year.
The decision will encompass airports, ports and Eurostar stations wherein overseas visitors will no longer be able to obtain a VAT refund on goods purchased in the UK.
Only tobacco and alcohol have been exempted from the scheme, while fashion, accessories and beauty products will be offered at the original prices at airports in what is being called a fresh blow to the already ailing aviation industry.
This move has made UK the only country in Europe to not offer tax-free shopping and will be a deterrent for consumers to look to London as a global shopping destination.
The Government has justified the announcement by citing concerns over “how the benefit is passed on to passengers and in some instances, the relief is not consistent with international tax principles.”
The new regulation means that overseas shoppers will have to purchase and directly ship products to their address to avail VAT-free shopping, which may ultimately be costlier than the product itself due to high cost of international shipping.
The decision has met with concern and criticism from the retail industry that is struggling to sustain itself during these times.
With a paucity of international visitors due to the pandemic, the new regulation will further put UK at a decided disadvantage against other European countries.