Several retailers and brands are urging chancellor Rachel Reeves to bring back tax-free shopping for tourists amid ongoing disruption as a result of President Trump’s tariffs.
In a joint letter, seen by The Times, the British Retail Consortium, the British Beauty Council, luxury goods body Walpole and the British Fashion Council said tariffs could “inflict long-term damage on British competitiveness”.
The letter includes the four trade bodies calling on the government to take action to “bolster domestic sales and international appeal”, including reinstating tax-free shopping for tourists.
The letter said “US tariffs will negatively impact our businesses’ profitability”, noting that UK goods were becoming less appealing to consumers in the US as a result.
“We are considering how we, as associations, and the UK government could best support businesses at this time,” it added.
The news comes as businesses are scaling back operations in the US as a result of concerns over a trade war, causing warnings from business leaders about the impact on UK exports and consumer demand.
The trade bodies added that consumer behaviour has been one of the most immediate shifts as UK brands say American consumers are now more likely to travel to shop rather than pay inflated prices at home.
However, this raises concerns as the UK no longer offers tax-free shopping for tourists, with many flocking to Paris and Milan instead.
The letter also said: “Introducing this policy is not a luxury. It is a proven growth strategy.”
A Treasury spokesperson said: “We have no plans to introduce a new tax-free shopping scheme in Great Britain. Visitors can continue to claim VAT relief where the items purchased are shipped directly to their home country as exports.”
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