The removal of VAT-free shopping cost London's West End £310 million in lost sales in the first half of 2025, a 40% increase from the previous year's £220 million and the largest six-month loss since 2021. Analysis by the New West End Company, representing 600 businesses across Bond Street, Oxford Street, Regent Street and Mayfair, estimates about £1.4 billion drained from the district since 2023. Survey responses show 75% of members are reviewing staffing, half are reconsidering UK investment, more than 80% report direct trading damage, over 90% see lower foreign footfall, and 96% say Paris and Milan are benefiting.
The scrapping of VAT-free shopping for international visitors has cost London's West End £310 million in lost sales during the first half of 2025, according to new research. The figure represents a 40 per cent rise on the £220 million recorded for the same period last year, and is the largest six-month loss since the scheme was abolished by the Conservative government in 2021.
Dee Corsi, chief executive of the NWEC, said higher taxes and wage costs were "compounding the pressure" on luxury retailers already hit by the end of the VAT rebate. A survey of members found that 75 per cent are reviewing staffing levels, while half are reconsidering investment in the UK. More than 80 per cent said the loss of tax-free shopping has directly damaged their trading performance.
"Tax-free shopping presents a rare, low-cost opportunity for the government to back Britain's near-term growth, create jobs, and give our businesses their competitive edge once more," Corsi said. "Not only is the scheme understood by global consumers, it is backed by business. The time to act is now, before the window of opportunity closes."
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