Question reference: S6W-11742
- Asked by: Paul McLennan, MSP for East Lothian, Scottish National Party
- Date lodged: 27 October 2022
-
Current status: Answered by Ivan McKee on 9 November 2022
Question
To ask the Scottish Government what its position is on the restoration of tax-free shopping for overseas visitors as a means of supporting Scotland’s retail and tourism sectors.
Answer
The Scottish Government does not have policy control over VAT rates or VAT exemptions. This is a fully reserved policy.
In a letter of 22 October 2021, the Cabinet Secretary for Finance, Kate Forbes, and the Cabinet Secretary for Economy, Fair Work and Culture, Fiona Hyslop, jointly called on the UK Government to reverse their decision to end VAT-free shopping following EU Exit. The letter called on the UK Government to introduce a VAT-free shopping scheme for EU and non-EU visitors to the UK.
The UK Government, as part of their ‘Mini Budget’ on 23 September 2022 announced the introduction of a new digital VAT-free shopping scheme. This however was scrapped as part of the reversal by the Chancellor Jeremy Hunt.
The Scottish Government’s position remains that the restoration of VAT-free shopping for all overseas visitors to the UK would help support Scotland’s retail sector.
The new rules put Scottish and UK-wide businesses at a disadvantage when compared to other European destinations who continue to operate VAT refund schemes.
Ultimately, the Scottish Government believes that all tax powers should be devolved to the Scottish Parliament so that we can provide the support that Scottish retailers and tourism businesses need.