Chancellor Rishi Sunak has announced that the tax-free shopping scheme for non-EU tourists will come to and end on December 31.

Any overseas visitors will no longer be able to claim back VAT on items purchased in the UK and brought back in their suitcases – a move that many worry will further hit the already struggling luxury sector.

The government decision also affects fashion, beauty and accessories retailers in airports, which will no longer offer duty-free deals to travellers, although food and alcohol will still offer it.

The move would mean the UK is the only country in Europe not to offer a tax-free shopping scheme for tourists.

The luxury and travel sectors have already seen a downturn amid the coronavirus pandemic as regulations limit unnecessary travel abroad and the worry is that without the scheme high-spending customers will go elsewhere to shop.

The Treasury has seen backlash from retailers, hoteliers and airports, which claim the decision will put 70,000 jobs at risk.

Marks & Spencer, Selfridges and the owner of designer outlet Bicester Village have all signed a letter urging the Treasury to rethink its plans.

Airport bosses from Heathrow, Gatwick and Manchester have also signed the letter.