Kemi Badenoch, leader of the UK’s Conservative Party, has announced plans to reintroduce tax-free shopping for international tourists by reversing a policy introduced after Brexit. In 2021, the UK ended a system that allowed overseas visitors to claim back VAT (value added tax) on purchases, which had been in place for decades. The Conservatives argue that this change made the UK less competitive compared to other European countries, which still offer tax-free shopping to tourists. Badenoch, who was a Treasury minister when the policy was scrapped, said the move hurt retailers by driving away potential customers. Business leaders, including those from high-profile brands like Fortnum & Mason, Paul Smith, and the parent company of Claridge’s hotel, had previously supported the 2021 policy change, calling it "pro-growth" and "pro-jobs." However, while visitor numbers to the UK have largely recovered to pre-pandemic levels, spending by tourists has not fully rebounded. According to VisitBritain, real-terms spending by international visitors is still 8% lower than it was before the pandemic, based on 2024 data. The Conservatives plan to restore the VAT refund scheme, but they also said this would be partially offset by measures targeting "health tourism." This would involve stricter enforcement of rules to ensure that patients not eligible for free NHS treatment pay their full costs. Additionally, tax-free shopping could be extended to EU tourists, depending on evidence, with the rollout expected to be completed by the end of the next Parliament. Business leaders have welcomed the pledge, saying it would help the UK compete globally and attract customers who might otherwise go shopping elsewhere. Badenoch emphasized that Britain should be a top destination for global shoppers, highlighting the country’s iconic retailers, innovative designers, and skilled manufacturers. She argued that British retailers are losing out to other countries where tourists can save money, leading to store closures and job losses. However, Labour criticized the Conservatives for what they called a "spectacular U-turn" on the policy. A Labour spokesperson pointed out that Badenoch had previously called tax-free shopping a costly giveaway and now claims it will be an economic boost, asking the Conservatives to explain how they would afford to bring it back. The Treasury noted that the UK remains one of the world’s most-visited countries, with international tourism contributing billions to the economy. The government aims to welcome 50 million international visitors annually by 2030. Currently, visitors can still claim VAT relief if their purchases are shipped directly to their home country as exports.