UK retailers demand return of tax-free shopping for tourists

UK retailers are renewing efforts to persuade Chancellor of the Exchequer Rachel Reeves to bring back tax-free shopping for tourists , as the government prepares to set out its plan to boost the so-called visitor economy.Making purchases exempt from VAT could result in £3.65 billion ($4.9 billion) of additional spending by visitors from the European Union, the Association of International Retail said in a submission to ministers published Tuesday. That’s on top of about £1.5 billion of spending by non-EU visitors the lobby group said was diverted from the UK when it scrapped tax-free shopping in 2021.The report sent to the Department for Culture, Media and Sport is the latest salvo in a long tussle between retailers and the government. Then Chancellor of the Exchequer Rishi Sunak used the UK’s exit from the EU as a chance to end a system that let travelers reclaim the 20% VAT sales tax on their purchases.Since then, Conservative and Labour governments — with the exception of the short-lived administration of former Prime Minister Liz Truss — agreed with Sunak’s assessment that the policy cost the Treasury more than it gained. Subsequent analysis by the Office for Budget Responsibility backed that view.Reeves faces a fiscal shortfall heading into this year’s autumn budget, after expensive U-turns on welfare cuts and amid reduced prospects for growth. It also cited figures showing visitor spending in the UK was 92% of 2019 levels last year, compared with 106% in Spain and 110% in France.

Source:The Times

July 22, 2025 12:57 UTC


UK and ChatGPT maker OpenAI sign new strategic partnership

Britain and ChatGPT maker OpenAI have signed a new strategic partnership to deepen collaboration on AI security research and explore investing in British AI infrastructure, such as data centres, the government said on Monday. "AI will be fundamental in driving the change we need to see across the country - whether that's in fixing the NHS (National Health Service), breaking down barriers to opportunity or driving economic growth," Peter Kyle, secretary of state for technology, said in a statement. "This can't be achieved without companies like OpenAI, who are driving this revolution forward internationally. This partnership will see more of their work taking place in the UK. "The government has set out plans to invest 1 billion pounds in computing infrastructure for AI development, hoping to increase public compute capacity 20 fold over the next five years.The United States, China and India are emerging as front runners in the race to develop AI, putting pressure on Europe to catch up.The partnership with OpenAI, whose tie-up with Microsoft once drew the scrutiny of Britain's competition regulator, will see the company possibly increase the size of its London office, and explore where it can deploy AI in areas such as justice, defence, security and education technology.In the same statement, OpenAI head Sam Altman praised the government for being the first to recognise the technology's potential through its " AI Opportunities Action Plan " - an initiative by Prime Minister Keir Starmer to turn the UK into an artificial intelligence superpower.The Labour government, which has struggled to increase economic growth meaningfully in its first year in power and has since fallen behind in polls, has said that the technology could increase productivity by 1.5% a year, worth an extra 47 billion pounds ($63.37 billion) annually over a decade.

Source:The Times

July 21, 2025 19:04 UTC


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