UK: Heathrow could lose 2,000 retail jobs because of 'tourist tax'

Heathrow could lose 2,000 retail jobs because of the government’s decision not to offer tax-free shopping for tourists, according to the airport’s CE. John Holland-Kaye said the move, which will make the UK the only country in Europe to have a “tourist tax” on international visitors, could be the “final nail in the coffin” for many struggling businesses in the retail and hospitality sectors. He said: “2021 should be the year of Britain’s economic recovery but recent announcements, such as the tourist tax, could be the final nail in the coffin for struggling businesses such as restaurants, hotels and theatres that rely on inbound tourists, as well as for retailers.” Passenger numbers at Heathrow fell by 88% in November as travel restrictions and a second coronavirus lockdown took their toll. Cargo flights were also well down. The airport said that based on current forecasts and a continued decline in passengers, it had decided that Terminal 4 would remain nonoperational until the end of next year. Holland-Kaye said the industry needed government support including full business rates relief for all UK airports and abandoning the “tourist tax”. Under new tax rules being introduced by the chancellor, Rishi Sunak, overseas visitors will no longer be able to benefit from tax-free sales and VAT relief on goods purchased in the UK from 1 January. The government has said that continuing to offer tax-free shopping is too expensive to administer, and that retailers who offer the service are putting other high street retailers at a competitive disadvantage However, trade bodies and retailers have all opposed the change.<br/>