** Quintessential Crockett & Jones Thread ** (reviews, quality, etc...)

[othertravel]

Here’s a good article on the issue:

In Britain, Watch Sellers Shocked at End of Sales Tax Refund (Published 2020)

Come 2021, travelers will no longer be reimbursed for most of the 20 percent VAT they paid on a Rolex or many other souvenirs.

www.nytimes.com

Looks like it will have a disproportionate impact on the high-end luxury retail space.

 

[nareichert]

I base it on the ecomonic reality. I appreciate that it might had made quite a difference to you; but the economic impact on UK GDP of reduced spending by foreign visitors into the UK because they now have to pay full VAT, is miniscule. Its a tiny part of our economy - the fact that the UK is a less attractive place for foreign visitors to purchase luxury goods (bec you now pay VAT), had no real economic impact at all. If you want to visit the UK to get cheap deals at Bicester Village and Harrods; I am not sue that is the kind of visitor we are trying to attract?

Yeah, you're 100% correct. I doubt tourism contributes more than 1% to the UK's GDP. With that being said this is a relevant topic for this thread. If you're looking for an actual conversation about negative impacts on the GDP of the UK I'm sure there is a forum on tariffs and supply chain inefficiencies somewhere out there.

 

[ZRH1]

Here’s a good article on the issue:

In Britain, Watch Sellers Shocked at End of Sales Tax Refund (Published 2020)

Come 2021, travelers will no longer be reimbursed for most of the 20 percent VAT they paid on a Rolex or many other souvenirs.

www.nytimes.com

Looks like it will have a disproportionate impact on the high-end luxury retail space.

Yeah, you're 100% correct. I doubt tourism contributes more than 1% to the UK's GDP. With that being said this is a relevant topic for this thread. If you're looking for an actual conversation about negative impacts on the GDP of the UK I'm sure there is a forum on tariffs and supply chain inefficiencies somewhere out there.

you are right in principle, but it is actually much higher at around 9% of GDP (2013).

 

[nareichert]

you are right in principle, but it is actually much higher at around 9% of GDP (2013).

I’m referring to the net spend, which is how an economist would view it. It’s all good though, we have gone too far down this path.

 

[Cheshire symposium]

I understand your point. The impact won’t be broad-based across the entire economy (i.e. no impact on auto sector, aerospace, etc...), but it could have a substantial effect on parts of the retail sector that are heavily reliant on tourism - e.g., the entire goods-retail landscape in London.

Most tourists are extremely price sensitive.
And eliminating the VAT deduction, plus the rising pound, is going to make things difficult for a lot of great retailers.

In my case, it was pretty simple.

The VAT deduction was an incentive to purchase 2 pairs of shoes instead of one (I’m sure there’s a behavioral economics chapter on this somewhere).
Plus more money freed up for other activities in the great city.

On a side note, Benedict Cumberbatch was sitting 2 rows ahead of me in the theatre. Fun times!

I think a lot of UK retailers, especially in London, have gotten lazy. For years, brands could rely on flogging goods to Japanese/Chinese/American customers with little effort, because the net price of goods was artificially low. As foreign customers could claim back most the VAT paid.

Is it really unreasonable to ask tourists to pay VAT? When I go to the US, I defiantly pay Sales Tax - I can't claim that back (at least I don't think that I can!), and still hundreds of thousands of Brits go on holiday to the US very year. I think that this will have a very negligible impact on tourism to the UK.

Although I appreciate that this may feel like a kick in the teeth for some, and maybe prevents them visiting the UK. I don't think you will find many folks over here in tears about it.

 

[zippyh]

Washington state has some kind of tax free thing for non residents but it’s limited by retailer and to residents of certain states and Canadian provinces.

 

[stook1]

Is it really unreasonable to ask tourists to pay VAT? When I go to the US, I defiantly pay Sales Tax - I can't claim that back (at least I don't think that I can!), and still hundreds of thousands of Brits go on holiday to the US very year. I think that this will have a very negligible impact on tourism to the UK.

In principle, not unreasonable. Having said that sales taxes in the US tend to be roughly 1/3 of the UK VAT. As a practical matter, eliminating the tax exemption is likely to have a very negative impact on foreign spending in the UK. In the US sales taxes are low enough and goods are cheap enough to begin with that the sales taxes probably don't tend to impact tourist spending.

 

[HorseHide]

Is it really unreasonable to ask tourists to pay VAT? When I go to the US, I defiantly pay Sales Tax - I can't claim that back (at least I don't think that I can!), and still hundreds of thousands of Brits go on holiday to the US very year. I think that this will have a very negligible impact on tourism to the UK.

I don't want to beat a dead horse but I do think it appropriate to respond to this question. Is it unreasonable to ask a tourist to pay VAT? Absolutely not. And the UK, and London in particular, will continue to be a compelling tourist destination regardless of price. But it's naive to think that price isn't a factor that is considered when planning a trip.

And my own experience with Mrs. Horsehide? When she joins me on a business trip to London she's shopping. She's been there numerous times as a tourist. She's choosing to spend money in London because of price. Take away the VAT refund incentive and those trips don't happen. We are just one couple, certainly not spending enough money to matter, but we aren’t unique.

Who knows how that 9% of GDP figure was calculated (and whether it was used in some political campaign surrounding Brexit) but compound Brexit, COVID and the trend to online shopping and it argues for a more material impact for this particular segment of the UK economy than you suggest.

It all may be a moot point for us because my business reasons for being in London will become less compelling post-COVID/post-Brexit, both because face-to-face meetings in general won't be deemed as essential and because London likely won't play the same outsized role as a global center of finance.

Shed a tear for us? Absolutely no. Shed a tear for a broad range of people starting with the shopkeeper in a retail establishment and ending with the Duke of Westminster? Maybe...

 

[stephenaf2003]

I’m referring to the net spend, which is how an economist would view it. It’s all good though, we have gone too far down this path.

I think a lot of UK retailers, especially in London, have gotten lazy. For years, brands could rely on flogging goods to Japanese/Chinese/American customers with little effort, because the net price of goods was artificially low. As foreign customers could claim back most the VAT paid.

Is it really unreasonable to ask tourists to pay VAT? When I go to the US, I defiantly pay Sales Tax - I can't claim that back (at least I don't think that I can!), and still hundreds of thousands of Brits go on holiday to the US very year. I think that this will have a very negligible impact on tourism to the UK.

Although I appreciate that this may feel like a kick in the teeth for some, and maybe prevents them visiting the UK. I don't think you will find many folks over here in tears about it.

In principle, not unreasonable. Having said that sales taxes in the US tend to be roughly 1/3 of the UK VAT. As a practical matter, eliminating the tax exemption is likely to have a very negative impact on foreign spending in the UK. In the US sales taxes are low enough and goods are cheap enough to begin with that the sales taxes probably don't tend to impact tourist spending.

I don't want to beat a dead horse but I do think it appropriate to respond to this question. Is it unreasonable to ask a tourist to pay VAT? Absolutely not. And the UK, and London in particular, will continue to be a compelling tourist destination regardless of price. But it's naive to think that price isn't a factor that is considered when planning a trip.

And my own experience with Mrs. Horsehide? When she joins me on a business trip to London she's shopping. She's been there numerous times as a tourist. She's choosing to spend money in London because of price. Take away the VAT refund incentive and those trips don't happen. We are just one couple, certainly not spending enough money to matter, but we aren’t unique.

Who knows how that 9% of GDP figure was calculated (and whether it was used in some political campaign surrounding Brexit) but compound Brexit, COVID and the trend to online shopping and it argues for a more material impact for this particular segment of the UK economy than you suggest.

It all may be a moot point for us because my business reasons for being in London will become less compelling post-COVID/post-Brexit, both because face-to-face meetings in general won't be deemed as essential and because London likely won't play the same outsized role as a global center of finance.

Shed a tear for us? Absolutely no. Shed a tear for a broad range of people starting with the shopkeeper in a retail establishment and ending with the Duke of Westminster? Maybe...

..lol, someone really needs to start a Brexit thread.

 

[zippyh]

Taking a break from tax talk.
C&J for Ralph scotch grain Lindricks.

 

[Mr_Spud]

..lol, someone really needs to start a Brexit thread.

That what this was REALLY about. ;-)

 

[EUtroll]

Well the VAT deduction isn't really brexit caused but of course everything come together.

I quite enjoy the mix, nice shoes and light politics.

 

[Mr_Spud]

Well the VAT deduction isn't really brexit caused but of course everything come together.

I quite enjoy the mix, nice shoes and light politics.

Just remember to keep the shoes light so that they don't hurt when we start kicking each other?

 

[ValidusLA]

That what this was REALLY about. ;-)

Seriously.

 

[EUtroll]

Just remember to keep the shoes light so that they don't hurt when we start kicking each other?

Zug must be the only choice, no?