British consumers are increasingly turning to tax-free shopping trips in Europe, with spending in the EU up 16% so far this year compared to 2024, according to new data from the Association of International Retail (AIR).
The figures highlight how UK shoppers are taking advantage of the EU’s VAT rebate scheme for tourists, introduced for British visitors in 2021 after Brexit. Last year, Britons spent £742 million on tax-free shopping in the EU – up from £527 million in 2022 – with analysts saying the savings outweigh the cost of Eurostar tickets or budget flights.
AIR chairman Derrick Hardman said the trend shows “a new market in shopping-led tourism has emerged”, adding: “It’s sad to see British shoppers taking their business elsewhere.”
The data will intensify calls for Labour to reinstate the UK’s own VAT-free shopping scheme for overseas visitors, scrapped in 2021 by the previous government. Culture Secretary Lisa Nandy has indicated the policy could be reconsidered.
Campaigners argue the decision costs the UK around two million international visitors a year and deters spending in British stores, particularly on luxury brands. Burberry and Harrods are among the companies warning that the policy disadvantages domestic producers, as shoppers are more likely to buy home-grown goods in countries offering rebates.
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