Inbound travel association UKinbound has issued a list of “key measures” it’s demanding of the government ahead of the Budget in March.
Top of a list of seven demands is the reintroduction of VAT-free shopping for international visitors. UKinbound claims this would generate £4.4 billion in spending over two years and £1.3 billion for the Treasury.
The association also calls for the reform of business rates and an extension of support for retail businesses beyond April 2023, pointing out the inbound sector depends on “a fully functioning domestic leisure, retail and hospitality industry . . . [when] current inflation and energy costs pose a threat to all these sectors”.
UKinbound urges creation of a Youth Group Travel Scheme for visitors from Europe under-18 to allow entry to those with European ID cards but not passports so long as group leaders hold passports.
The government ended recognition of EU member state ID cards at the border when Britain left the EU and UKinbound chief executive Joss Croft revealed this month that youth group travel from the EU, a sector worth £1 billion a year, remained 84% down on 2019 at the end of 2022.
Croft also called for reform and expansion of the Youth Mobility Scheme (YMS) for 18-30 year olds “which is under-utilised due to the small number of countries with which the UK has a YMS agreement” since Brexit.
He urged the government to overhaul the UK visa system and reduce the cost of a five-year multiple-entry visa to £145 “to encourage international visitors to upgrade from a £95 standard visa”.
UKinbound also called for an increase in VisitBritain’s budget and a freeze on Air Passenger Duty (APD) for the remainder of this Parliament.
The UK ended VAT-free shopping for international visitors when Britain left the EU in January 2021, with the Treasury choosing to ‘level up’ the VAT requirements for EU visitors with those for other international arrivals by removing tax-free shopping for all.
Both the retail and inbound sectors had urged the Treasury to do the opposite and extend tax-free shopping to all visitors.
In September, the short-lived government of Liz Truss announced the reinstatement of VAT-free shopping as part of its disastrous ‘mini-budget’. But the replacement government of Rishi Sunak vetoed the return of tax-free shopping in October.
Croft said: “The government has set a target to increase the levels of inbound visitors and spending by the end of this year to levels seen in 2019. In the current climate, this is exceptionally challenging.”
He said the challenge had been “exacerbated by the reintroduction of testing restrictions on arrivals from mainland China” and argued: “The Budget presents a fantastic opportunity to implement policies that will not only enable the industry to reach these targets but surpass them.”
Croft added: “The next six months are critical to our industry’s recovery.”
Associations across the travel industry are ramping up their lobbying efforts in anticipation of a Budget on March 15 that will focus on growth.
Advantage Travel Partnership chief executive Julia Lo-Bue Said called on the government this week to address the “unique difficulties” faced by the UK outbound sector, and Abta chief Mark Tanzer urged ministers “to resolve [the] outstanding issues” from Brexit.
Tanzer highlighted the Youth Mobility Scheme as a “sensible and realistic” approach to the challenge businesses face now UK nationals are limited to working in the EU for only 90 days in any 180-day period.
He noted: “We know from our extensive experience of lobbying that government doesn’t want to just hear a list of problems, it wants to be presented with solutions.”