More than 40 Tory MPs have warned Rishi Sunak that giving up duty-free shopping could cost up to 50,000 jobs.
They say the Chancellor's decision to abolish the system next year will make the UK less attractive to international visitors.
The move could affect not only London but airports and shopping malls across the country, including Edinburgh, Manchester and Bicester Village. Luxury brands like Burberry, Mulberry, and Church & # 39; s could also be affected.
MPs warn that wealthy visitors, whom they refer to as "super-funders", will leave London for Paris and Milan. Pictured: shoppers in Harrods
In the letter the Mail sees, MPs write, "We believe this tax hike … will reset the government's leveling agenda and damage our ambitions for a global UK."
They warn that wealthy visitors, whom they refer to as "super-donors", will leave London for Paris and Milan.
The Treasury Department says the program will primarily benefit capital and not support the level-up agenda.
More than 40 Tory MPs have warned Rishi Sunak that foregoing duty-free shopping could cost up to 50,000 jobs
However, industry groups argue that tax-free shopping is worth £ 3.5 billion a year and directly supports 70,000 jobs. They forecast a decrease of 1.16 million visitors a year, mostly from China and the Middle East.
Sir Geoffrey Clifton-Brown, who heads MEPs, said: “As soon as we leave the EU, the World Trade Organization has indicated that we cannot offer duty-free shopping or VAT refunds to non-EU citizens without offering them to EU residents. The number of EU citizens is quite large and the Ministry of Finance has indicated that it will not be worth it.
“However, we believe the Treasury Department has overestimated the VAT loss for EU buyers. If it's not so attractive to come here, these buyers just book a nice hotel and stay at the Opera in Paris instead of London. "
Tory MP Nickie Aiken, who represents the cities of London and Westminster, said, "It's not about the West End, it's not about London, it's about airlines, manufacturing."
Tory MP Nickie Aiken, who represents the cities of London and Westminster, said, "It's not about the West End, it's not about London, it's about airlines, manufacturing." We need to be able to bring as many of our international visitors as possible back to these coasts. "
The issue was raised with Mr. Sunak at a meeting of the Tory Backbencher Committee in 1922 last Wednesday evening.
A Treasury Department spokesman said: "Around 92 percent of visitors to the UK do not use the VAT retail export system and expanding to the EU could bring the total cost up to £ 1.4 billion a year.
“Tax-free shopping is still possible in-store when goods are sent to addresses overseas. This removes a tax cut that mostly benefits foreign billionaires. "
WHY DO WE NEED TO STAY OPEN TO BUSINESS
BY ALEX BRUMMER CITY EDITOR
Boris Johnson's administration will shoot itself in the foot if it continues to advance a treasury plan to suspend VAT refunds for overseas visitors to the UK.
Politicians directly contradict the slogan "Global Britain", which was passed after the Brexit referendum.
There couldn't be a worse time to punish the shopping malls favored by foreign tourists to the UK.
Bicester Village in Oxfordshire (pictured 2019), with its cluster of luxury shops selling the best goods at reduced prices, has been a magnet for tourists to the UK
Bicester Village in Oxfordshire, with its cluster of luxury shops selling the best goods at reduced prices, has been a magnet for tourists to the UK.
It is the preferred choice for visitors from China and the Asia Pacific region, enjoying British and overseas designer labels from Paul Smith and Burberry to Dior.
With much of the world's air traffic in England on the ground and non-essential stores trapped in a second lockdown, the UK's biggest names are gasping for air. In addition to suffering, Bicester suffers from upscale malls like Westfield malls across the country and some of the most iconic names in UK retail from Selfridges to Fortnum & Mason.
Even the mighty Harrods in London's lively Knightsbridge had to lay off around 700 employees. The concern is that well-heeled visitors from all over the world will redirect to Paris, Milan or Berlin if the VAT reduction is canceled.
In addition to suffering, Bicester suffers from upscale malls like Westfield malls across the country and some of the most iconic names in UK retail from Selfridges to Fortnum & Mason (pictured 2019).
One can understand why the Treasury Department is eager to fill the loopholes in a desperate search for new tax revenue to fill a bloody £ 400 billion budget deficit this year.
It is believed that after Brexit there could be a potential loss of £ 1.4bn of VAT revenue as European visitors could also take advantage of the 20% refund on purchases. The timing of the planned crackdown in January 2021 is dire.
Economists expect the economy to recover robustly over the next year as Covid-19 test and trace become more effective and first vaccines become available.
The rejuvenation of the travel, tourism and hospitality industries, which make up a large part of the UK's service trade, is essential to prosperity, living standards and employment.
Even the mighty Harrods (pictured) in London's lively Knightsbridge had to lay off around 700 employees
Every year around 4.96 million tourists from outside the EU visit the UK, with more than 1.2 million using the program. The fear is that the introduction of VAT could put 138,000 jobs at risk and collapse some of the best-known names in British purchasing – known around the world.
Air traffic would be diverted to other European capitals, hotels in the country's largest cities could suffer and tourist destinations would be without business.
There is a good opinion that agrees with the argument to abandon the proposed policy in the culture and business departments of Whitehall.
Rishi Sunak and HMRC must urgently withdraw from a clearly anti-Tory and free corporate policy that would deprive the nation of valuable foreign currency and jobs.
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