The prospect of reversing the "tourist tax" in the upcoming spring budget has diminished. Financial Secretary to the Treasury, Nigel Huddleston, has highlighted the complexities involved in reinstating the previous system.
Huddleston's concerns stem from the UK's departure from the EU. Any new scheme must accommodate visitors from both the EU and the rest of the world, presenting significant legislative and implementation challenges. Additionally, Chancellor Jeremy Hunt emphasizes fiscal responsibility, suggesting alternative measures to stimulate tourist spending, such as a VAT-free shopping scheme.
Chancellor Hunt has commissioned a review into the financial implications of reinstating the tax-free shopping scheme. The Office for Budget Responsibility is expected to provide its findings along with the spring budget.
Despite growing calls from business leaders to reinstate the scheme, the Treasury remains hesitant. The Prime Minister's reluctance to reverse a decision made during his tenure as chancellor may further complicate the issue.
Business advocates argue that the scheme would stimulate economic growth, boost tourism, and create jobs. They urge swift action to reinstate it, particularly in light of major events like the Paris Olympics.
Hotelier Sir Rocco Forte sees Brexit as an opportunity to extend the scheme to a broader market, including the EU. He believes that decisive legislative action could garner support from the business community and enhance the impact of the budget.