VAT Retail Export
Scheme
(Paisley and Renfrewshire North) (SNP)
What discussions he has had with representatives of the (a)
retail and (b) aviation industries on the VAT retail export
scheme and airside extra statutory concessions.
The Exchequer Secretary to the Treasury ()
During the consultation on duty free and tax-free goods carried
by passengers in 2020, the Government engaged extensively with
various stakeholders and carefully considered 73 consultation
responses. I have continued to meet stakeholders, including
retail and aviation representatives, following our announcement.
[V]
Given the deep trouble within retail and aviation, with Debenhams
one of many chains disappearing from high streets with the loss
of tens of thousands of jobs and, as the Minister will be aware
with Stansted and its importance for employment in her
constituency, aviation by and large grounded, does she not accept
it was a mistake to scrap the VAT retail export scheme and the
extra-statutory concessions, both of which brought much needed
revenue to the retail sector at airports, which is now lost from
the economy, possibly for good?
We do not accept that. The independent Office for Budget
Responsibility set out its assessment of the fiscal impact of the
withdrawal of the VAT RES scheme, factoring in a higher than
usual elasticity to account for spending on luxury goods. Its
estimate is that this will result in a significant Exchequer
saving of about £400 million per year. On airports, we recognise
the challenges the aviation sector is facing as it recovers from
the impacts of covid-19. We have supported the sector throughout
the pandemic and continue to do so. This includes the recently
announced airport and ground operator support scheme, which will
provide eligible firms with support of up to £8 million per
claimant.
