Foreign tourists are choosing to shop in continental Europe instead of London after the UK scrapped tax-free shopping incentives post-Brexit.
Non-EU shoppers in the UK are required to pay 20% VAT for items purchased after the tax-free incentive was dropped in 2021.
Data from Global Blue, a Swiss tax rebate provider that tracks passport numbers, shows that a fifth of the UK’s foreign shoppers in 2019, 34 000 tourists, switched their tax-free shopping from London to Paris, Madrid and Milan.
The data recorded a significant increase in average spending from €2 900 (R57 350) per person in 2019 to €3 800 (R75 150) in 2023, indicating a notable economic shift.
Chinese shoppers account for less than half of pre-COVID numbers, and the nationality of shoppers has also shifted, with the majority from the Middle East (33%) and America (19%).
