London is losing ground to the EU due to lack of ‘tax-free’ purchases.

London is losing international clients. Of the total 162,000 non-EU tourists who requested a VAT refund in Great Britain in 2019, a fifth are now doing so in other EU countries, according to Progress. Bloomberg. International consumers are now choosing to buy in European capitals such as Paris and Milan, after the UK canceled the tax extension four years ago. Which allows foreign tourists to recover the value-added tax on their purchases (20%), known as Tax-free.

34 thousand tourists transferred their purchases Tax-free To other countries, in addition, too They have raised average spending to €3,800 per person, compared to the €2,900 they spent in 2019.. The main beneficiary countries are France and Italy, which have a famous luxury goods sector and attract more than two-thirds of these consumers.

United kingdom It canceled the program in 2021 after Brexit, a move that has been criticized by retailers, especially luxury brands, for years.It is the sector that benefits most from this extension. The sector estimated up to 10,700 million pounds sterling annually (12,526 million euros), which the absence of procurement costs the country’s economy. Tax-freeand urged the executive authority on various occasions to return it.

London estimates the benefit of canceling purchases at about 536 million euros Tax-freeWhile the luxury goods sector denounces the opposite

For its part, the country’s Ministry of Economy estimated the cost of this operation at 2,000 million pounds sterling (2,341 million euros). In a government-commissioned audit, the Office for Budget Responsibility, the government’s spending watchdog, The benefits associated with this measure were estimated at approximately 462 million pounds (536 million euros) during the last financial year.

“If we want British brands to be able to invest in jobs, stores and people, We must attract foreign buyers to spend more money in the UKsaid Thierry Andretta, CEO of Mulberry Group. To do this, the executive argues that it must be able to offer the same tax-cutting policy that “they enjoy in the rest of the world.”

newly, British department store group Selfridges has implemented cuts to its workforce due to weak results in its 2023 financial year. The CEO emphasized that this is precisely the absence of order Tax-free This caused a “significant impact” on international sales and weighed on its profits.