The Association of International Retail (AIR) says that one reason the U.K. government is dropping tax-free shopping is that the current paper-based validation system used by the tax department, HMRC, would not be able to manage VAT refunds once they become available to EU tourists from January. EU travellers account for 70% of all U.K. visitors.
AIR’s CEO Paul Barnes believes that a way forward could be through a cooperative stance. “Government should use the 18-month window of low international visitor numbers (due to Covid-19) to work with retailers and their partners to provide a digital solution to the validation element,” he said. “Linked to existing retailer digital infrastructure, this will provide the necessary capacity within 12 months and at no cost to government. Retailers have done this with many governments around the world.”
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