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British VAT-Free Spending in EU Reaches £742 Million and Climbs 16% in 2025

Business leaders warn reinstating the scheme could fuel thousands of jobs with billions of pounds in growth ahead of the Treasury’s visitor economy strategy this autumn.

British shoppers are flocking to centres such as Galeries Lafayette in Paris where they can enjoy VAT-free purchases
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Overview

  • VAT-free spending by UK shoppers in the EU rose more than fivefold from £147 million in 2021 to £742 million last year.
  • Britons’ tax-free purchases in the first 22 weeks of 2025 were up 16% compared with the same period in 2024, underlining a sustained surge.
  • More than 500 business leaders, including executives from Burberry and Primark, have joined a campaign urging Chancellor Rachel Reeves to reinstate a universal VAT-free scheme.
  • An analysis by the Association of International Retail estimates that reversing the policy could create 73,000 jobs, add £3.65 billion to GDP and raise over £500 million in extra annual VAT revenue.
  • HM Treasury says it will publish a national visitor economy strategy this autumn but has not restored tax-free shopping for overseas visitors since the 2021 repeal.