Britain’s leading retail, luxury, and fashion groups are calling on Chancellor Rachel Reeves to reinstate tax-free shopping for international visitors, warning that mounting pressure from US tariffs is eroding UK competitiveness and forcing businesses to scale back transatlantic operations.
In a joint letter four major trade bodies — the British Retail Consortium, British Beauty Council, British Fashion Council, and Walpole, which represents UK luxury brands — urged the Treasury to act swiftly. Their message: restoring VAT-free shopping is not a luxury, but a “proven growth strategy” needed to help the UK economy weather worsening global trade disruption.
“US tariffs will negatively impact our businesses’ profitability,” the organisations wrote. “We are considering how we, as associations, and the UK government could best support businesses at this time.”
The plea comes amid rising concern over the economic fallout from President Trump’s trade policies, which have seen tariffs imposed on a range of UK goods. British businesses in fashion, beauty and luxury sectors are reporting falling demand from American buyers, rising pressure to reduce wholesale prices, and order cancellations.
Some UK companies have already reduced exposure to the US market, while others report a shift in American consumer behaviour — opting to travel abroad for luxury purchases rather than pay higher prices at home. But with the UK no longer offering tax-free shopping, those dollars are increasingly being spent in Paris, Milan and Madrid, where tourists can still reclaim VAT on purchases.
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