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Written Question
Exports: VAT
Tuesday 6th February 2024

Asked by: Geoffrey Clifton-Brown (Conservative - The Cotswolds)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to his oral contribution of 22 November 2023, Official Report column 349, what the evidential basis is for the statement that the VAT Retail Export Scheme cost around £2.5 billion a year; and if he will publish the methodology underpinning this costing.

Answered by Nigel Huddleston - Financial Secretary (HM Treasury)

The Growth Plan, published in 2022 (https://www.gov.uk/government/topical-events/the-growth-plan), indicated that introducing a worldwide scheme would come at a fiscal cost of around £2 billion each year. This figure consists of the cost from EU and non-EU visitors and is based on the same methodology as costings of the abolition of VAT RES and the associated airside scheme published in 2020 (https://assets.publishing.service.gov.uk/media/5fbd2087d3bf7f5735e29b41/Policy_costings_2020_final.pdf). Updating that figure with the latest economic determinants suggests the cost would be in the region of £2.5bn.
Written Question
Exports: VAT
Tuesday 6th February 2024

Asked by: Geoffrey Clifton-Brown (Conservative - The Cotswolds)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to paragraph 5.87 of the Autumn Statement 2023, CP 977, published on 22 November 2023, in what form his Department prefers to receive (a) industry representations and (b) broader data on the VAT Retail Export Scheme.

Answered by Nigel Huddleston - Financial Secretary (HM Treasury)

The government recognises a range of qualitative and quantitative data will be relevant for considering the VAT Retail Export Scheme and is grateful for all industry submissions. The government is continuing to accept representations and considering this new information carefully alongside broader data.


Written Question
Exports: VAT
Tuesday 6th February 2024

Asked by: Geoffrey Clifton-Brown (Conservative - The Cotswolds)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to paragraph 5.87 of the Autumn Statement 2023, CP 977, published on 22 November 2023, until what date his Department will continue to accept (a) industry representations and (b) broader data on the VAT Retail Export Scheme.

Answered by Nigel Huddleston - Financial Secretary (HM Treasury)

The Government takes an ongoing interest in the VAT Retail Export Scheme and continues to accept industry representations. The Government has not set a deadline by which submissions must be received and HM Treasury continues to consider all evidence submitted by stakeholders.


Written Question
Exports: VAT
Tuesday 25th July 2023

Asked by: Geoffrey Clifton-Brown (Conservative - The Cotswolds)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made with Cabinet colleagues of the impact of the removal of the VAT Retail Export Scheme on the arts and culture sectors.

Answered by Victoria Atkins - Secretary of State for Health and Social Care

The Chancellor has been clear that being responsible with the public finances is a priority. Government analysis done in 2022, which took increased tourist spending into account, found that introducing worldwide VAT-free shopping would come at a fiscal cost of around £2 billion each year.

The Government engaged with varied stakeholders and produced analysis on the cost of VAT-free shopping before withdrawing the previous scheme, and the OBR’s assessment of the previous VAT Retail Export Scheme showed that its withdrawal would have a limited behavioural effect on decisions to visit, or spend, in the UK.


Written Question
Exports: VAT
Tuesday 25th July 2023

Asked by: Geoffrey Clifton-Brown (Conservative - The Cotswolds)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent assessment he has made of the impact of the removal of the VAT Retail Export Scheme on the economy.

Answered by Victoria Atkins - Secretary of State for Health and Social Care

The Chancellor has been clear that being responsible with the public finances is a priority. Government analysis done in 2022, which took increased tourist spending into account, found that introducing worldwide VAT-free shopping would come at a fiscal cost of around £2 billion each year.

The Government engaged with varied stakeholders and produced analysis on the cost of VAT-free shopping before withdrawing the previous scheme, and the OBR’s assessment of the previous VAT Retail Export Scheme showed that its withdrawal would have a limited behavioural effect on decisions to visit, or spend, in the UK.


Written Question
Retail Trade: VAT
Tuesday 25th July 2023

Asked by: Geoffrey Clifton-Brown (Conservative - The Cotswolds)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether his Department has made an assessment of the potential merits of developing mitigations to help support businesses in the context of the removal of the VAT-free shopping scheme and commitments made in the Tourism Recovery Plan Update.

Answered by Victoria Atkins - Secretary of State for Health and Social Care

The Chancellor has been clear that being responsible with the public finances is a priority. Government analysis done in 2022, which took increased tourist spending into account, found that introducing worldwide VAT-free shopping would come at a fiscal cost of around £2 billion each year.

The Government engaged with varied stakeholders and produced analysis on the cost of VAT-free shopping before withdrawing the previous scheme, and the OBR’s assessment of the previous VAT Retail Export Scheme showed that its withdrawal would have a limited behavioural effect on decisions to visit, or spend, in the UK.


Written Question
Exports: VAT
Tuesday 25th July 2023

Asked by: Geoffrey Clifton-Brown (Conservative - The Cotswolds)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the potential impact of removing the VAT retail export scheme on jobs in the (a) retail, (b) hospitality and (c) tourism sectors.

Answered by Victoria Atkins - Secretary of State for Health and Social Care

The Chancellor has been clear that being responsible with the public finances is a priority. Government analysis done in 2022, which took increased tourist spending into account, found that introducing worldwide VAT-free shopping would come at a fiscal cost of around £2 billion each year.

The Government engaged with varied stakeholders and produced analysis on the cost of VAT-free shopping before withdrawing the previous scheme, and the OBR’s assessment of the previous VAT Retail Export Scheme showed that its withdrawal would have a limited behavioural effect on decisions to visit, or spend, in the UK.


Written Question
Exports: VAT
Tuesday 25th July 2023

Asked by: Geoffrey Clifton-Brown (Conservative - The Cotswolds)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent assessment he has made of the impact of the removal of the VAT Retail Export Scheme on tourism destinations across the UK.

Answered by Victoria Atkins - Secretary of State for Health and Social Care

The Chancellor has been clear that being responsible with the public finances is a priority. Government analysis done in 2022, which took increased tourist spending into account, found that introducing worldwide VAT-free shopping would come at a fiscal cost of around £2 billion each year.

The Government engaged with varied stakeholders and produced analysis on the cost of VAT-free shopping before withdrawing the previous scheme, and the OBR’s assessment of the previous VAT Retail Export Scheme showed that its withdrawal would have a limited behavioural effect on decisions to visit, or spend, in the UK.


Written Question
Exports: VAT
Tuesday 25th July 2023

Asked by: Geoffrey Clifton-Brown (Conservative - The Cotswolds)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the potential impact of removing the VAT Retail Export Scheme on small businesses.

Answered by Victoria Atkins - Secretary of State for Health and Social Care

The Chancellor has been clear that being responsible with the public finances is a priority. Government analysis done in 2022, which took increased tourist spending into account, found that introducing worldwide VAT-free shopping would come at a fiscal cost of around £2 billion each year.

The Government engaged with varied stakeholders and produced analysis on the cost of VAT-free shopping before withdrawing the previous scheme, and the OBR’s assessment of the previous VAT Retail Export Scheme showed that its withdrawal would have a limited behavioural effect on decisions to visit, or spend, in the UK.


Written Question
Duty Free Allowances
Wednesday 16th November 2022

Asked by: Geoffrey Clifton-Brown (Conservative - The Cotswolds)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what estimate his Department made in the Growth Plan 2022 of what the total cost would be of restoring both the VAT Retail Export Scheme and airside tax-free shopping to all international visitors in the 2025-26 financial year.

Answered by Victoria Atkins - Secretary of State for Health and Social Care

The Chancellor announced on 17 October 2022 that the Government will not be proceeding with plans to introduce a new VAT-free shopping scheme. This decision was included as part of the reversal of almost all of the tax measures set out in the Growth Plan on 23 September which have not been legislated for in Parliament. The Chancellor has taken these decisions to ensure the UK’s economic stability and to provide confidence in the Government’s commitment to fiscal discipline. The Chancellor made clear in his statement that the UK’s public finances must be on a sustainable path into the medium term.

Introducing VAT-free shopping would come at a significant fiscal cost as it would subsidise a large amount of tourist spending which already occurs without a tax relief in place.

The independent Office of Budget Responsibility 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.