Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether she plans to introduce tax free shopping in tourist destinations.

Earlier this year, the Office for Budget Responsibility conducted a review of the previous government’s 2020 costing of removing tax-free shopping for tourists. The OBR’s updated estimate is that the withdrawal of the VAT Retail Export Scheme will lead to a saving for the Exchequer of around £540 million by 2025-26 (compared to £460 million when originally costed in 2020).

The Government has inherited a challenging fiscal position. Debt is near 100% of GDP and borrowing is more than double what it was before the pandemic. In addition to this, a recent Treasury audit has revealed an additional £21.9 billion pressure on departmental spending.

The Chancellor has confirmed that she will be making decisions on tax policy, in this context, at the Budget on 30 October.