West End loses £310m in retail sales due to absence of tax-free shopping

The absence of tax-free shopping cost West End businesses £310 million in unrealised sales in the first half of 2025.

According to research by New West End Company, this reflects a 40% increase compared to the same period in 2024, and the largest loss across the half year since the policy was removed.

The data highlights that the absence of tax-free shopping remains a "major concern", with 83% of respondents saying it is directly harming trading performance.

It comes as 92% of West End businesses report a decline in international spending, while 81% have seen a drop in overseas visitors.

Nearly all those surveyed (96%) believe that potential international spending is being redirected to cities like Paris and Milan.

Rising operational costs and shifting consumer patterns are also exacerbating the situation, with 75% of respondents saying they are reviewing staffing levels and 50% are rethinking investment in the UK.

This is despite a continued growth of travel and shopping globally, with the World Travel and Tourism Council (WTTC), forecasting worldwide international visitor spending is set to reach $2.1 trillion in 2025, surpassing previous highs in 2019 by $164 billion.

Dee Corsi, Chief Executive of New West End Company said: "The data is clear: losing tax-free shopping is costing UK businesses, with the value of unrealised sales growing year-by-year. And with the high cost of doing business in the UK compounding the pressure, many businesses are being forced to review their staffing or investment decisions.

"But it doesn’t have to be that way. 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.

"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."