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Written Question
Duty Free Allowances
Tuesday 7th March 2023

Asked by: Earl of Liverpool (Conservative - Excepted Hereditary)

Question to the HM Treasury:

To ask His Majesty's Government whether they will carry out a detailed cost-benefit analysis of tax-free shopping which also takes account of the potential benefits to the wider economy of removing such taxes.

Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)

The independent Office for Budget Responsibility (OBR) published their assessment of the withdrawal of the previous VAT-free shopping schemes in November 2020. This showed that the withdrawal of VAT-free shopping would raise a significant amount of revenue and have a limited behavioural effect on decisions to visit, or spend, in the UK. The Treasury remains confident in the OBR’s analysis.