Local Conservative Councillors have expressed their opposition to Government plans to end VAT-free shopping for international visitors. The VAT Retail Export Scheme (VAT RES) which allows international shoppers to reclaim the VAT paid on goods purchased but not consumed in the UK is set to be scrapped on 31 December unless goods are posted to the buyer’s home address.
With the move set to impact the luxury retail sector, Bicester Councillor Michael Waine tabled a motion to Oxfordshire County Council today requesting the Leader of the Council write to the Chancellor of the Exchequer to urge him to reverse the planned withdrawal of the scheme.
“Council notes with concern the decision by HM Treasury to bring to an end VAT-free shopping for the majority of goods from 31st December 2020 unless said goods are posted to the buyer’s home address abroad.
Whilst Council recognises that Brexit will present many challenges, the need for levelling up across the Country as highlighted by the treasury, and the need to ensure such schemes are appropriately used, Council feels that the approach adopted is akin to the proverbial ‘Sledgehammer to crack a nut’.
Council believes the best way to achieve the ‘Levelling up’ agenda is by increasing economic performance in other areas, not harming or penalising existing well-performing areas.
In particular, Council is concerned of the impact this measure will have on Bicester Village and the wider economy and local jobs supported, but also the knock-on effect to wider tourist attractions and businesses whom rely on visitors who make Bicester just one step of an itinerary around Oxfordshire and who may choose not to do so if the cost of shopping is now 20% more expensive.
Council calls on the Leader and Chief Executive to write to the Chancellor of the Exchequer and all the local Members of Parliament opposing such as move and asking them to reconsider or allow exceptions, given the likely detrimental effect this will have on the Oxfordshire Economy.”
The motion was passed with the support of Conservative and Independent Councillors. Labour Councillors voted against whilst Green and Liberal Democrat Councillors abstained.
Councillor Waine said: “I am grateful to my colleagues that supported this motion. The VAT Retail Export Scheme makes the UK an attractive retail destination for international visitors – something we here in Bicester see evidence of daily.
Over 7 million people visited Bicester Village in 2019 and with over 160 stores on-site, it supports thousands of local jobs. If enacted, the removal of VAT RES will make the UK the only European country not to offer VAT-free shopping to overseas visitors. It is an own goal and the potential knock-impact locally is significant not just for Bicester but for Oxfordshire as a whole - tourism is worth £2.5 billion to Oxfordshire’s economy which is 10% of our local GDP.
I sincerely hope the Chancellor will accept our representations, and those of others, including the Association of International Retail (AIR), and look again at this decision.”