40,000 jobs at risk if duty-free purchases are cut

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40,000 jobs at risk if duty free shops are cut, retail organization warns Rishi Sunak

  • Decision could leave taxpayers with billions of pounds out of pocket, Chancellor was told
  • According to the Association of International Retail, 25,000 retail workers and 15,000 factory workers who make luxury goods for major UK brands face layoffs
  • According to the organization, £ 1.4 billion saved by the move will be eclipsed by a loss of £ 6 billion caused when tourists travel to France and Italy instead of the UK to take advantage of the laws of the ‘EU on duty-free purchases

Scrapping duty-free purchases could cost 40,000 jobs and leave taxpayers with billions of pounds in their pockets, Chancellor Rishi Sunak warned last night.

The Association of International Retail (AIR) says 25,000 retail workers and 15,000 factory workers who make luxury goods for big UK brands are at risk of sacking after decision to remove the benefit tax exemption at the end of the year.

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The organization, which is helping UK retailers sell more goods overseas, also says the £ 1.4bn saved by the move will be eclipsed by a £ 6bn loss caused by some tourists, including including “ super-spenders ” from China and the Middle East. , head to France and Italy instead of the UK to take advantage of EU tax-free shopping laws.

He also says the Chancellor risks ‘wasting’ the £ 250million he is spending to keep those 40,000 workers on leave, only to lose their jobs in March.

Scrapping duty-free purchases could cost 40,000 jobs and leave taxpayers with billions of pounds in their pockets, Chancellor Rishi Sunak warned last night.

AIR CEO Paul Barnes said last night: ‘I urge the Chancellor to review the numbers. It is not only the main street that it endangers, but also the livelihoods of the people.

It is estimated that tourists spend £ 22 billion annually on hotels, restaurants and cultural attractions, but some economists fear the cut to duty free shopping will hit cities like Birmingham, Edinburgh, Liverpool, London, Manchester and Oxford. Luxury brands such as Burberry and Mulberry say their businesses could be hit hard.

In a letter to Sunak last week, 40 Tory MPs called on him to reverse his decision, which they said would “ delay the government’s leveling program. [to help the North] and undermine our ambitions for a global Britain ”.

Tourism bosses are also concerned. Adrian Ellis, managing director of the Lowry Hotel in Salford and chairman of the Manchester Hoteliers Association, said: “There are concerns that international trade may be cut by 50%.”

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Alex Nicholson-Evans, Commercial Director of Birmingham Museums Trust, said: “The removal of duty free shopping will put the UK at a disadvantage, making us a less attractive destination at a critical time in our recovery.

Meanwhile, Robert Ettinger, owner and president of luxury leather goods brand Ettinger, said: “Our Birmingham factory employs highly skilled craftsmen who rely on London retailers for their work.

“Any reduction in activity could be detrimental to the future and to the growth of their jobs and the business.”

A spokesperson for the Treasury said: ‘Around 92% of visitors to the UK do not use the retail VAT export regime and its extension to the EU could increase total costs by up to 1 , £ 4 billion per year.

“Duty-free purchases are always available in stores when goods are shipped to addresses overseas.

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