Now is not the time to end tax-free perk

In a letter to the Chancellor of the Exchequer, Rishi Sunak, the former UK Trade Minister describes the move as “frankly, incomprehensible at a time when the retail sector and many of the companies which supply it are reeling under the effects of Covid-19 and the resultant decimation of international tourism”

Mr Wilson writes: “Our own company is not, except at the margins, a retailer. However, many of the UK customers to whom we sell Harris Tweed fabric depend heavily on the international tourism trade for the sale of garments and accessories. “

“This is already the sector which has been hardest hit by the pandemic, with significant knock-on effects for our business.

“Why on earth anyone should think this is an appropriate time to attack it on another front is beyond me. Surely we should all be working towards the return of international visitors to the UK as soon as conditions permit rather than introducing a measure which might have been specifically designed to discourage them?”

He points out that the proposed measure would “leave us as the only country in (or newly departed from) the EU not to offer tax-free shopping to international visitors. Since shopping is invariably quoted in every survey as one of the primary attractions for overseas visitors, it is difficult to see why you would want to discourage it in this way”.

Mr Wilson continues: “I have spoken to retailers on whom we rely for the sale of Harris Tweed end- products in key tourist areas like Edinburgh, Inverness and London.

Their unanimous view is that existing arrangements act as a considerable incentive for international visitors to buy – and to buy more than they otherwise would because of the reimbursement that is available to them.

He said it was “important to understand that this is not ‘just about Harrod’s’. It will have an impact in every corner of the country, including the villages of the Outer Hebrides where our business gives employment to mill-workers and home weavers”.

At present, tax-free shopping is worth around £3.5 billion a year to UK retailers.

However, the government fears that after we have left the EU completely, it would be necessary to extend the concession to EU visitors as well as those from other destinations.