As shoppers descended on London’s Oxford Street in black cabs or on foot to browse the city’s high-end shops on Friday, a massive sign affixed to Selfridges towered above their heads: ‘Let’s change the way we shop shop”.
The change, however, may be somewhat different than expected. Soon, the region could benefit from two plans announced by Chancellor Kwasi Kwarteng on Friday: the return of duty-free shopping on the high street and the scrapping of the 45% income tax bracket.
Coming out of Selfridges with the unmistakable yellow bag hanging from the crook of her arm, Rita Waters, 66, greeted Kwarteng’s mini budget. Although the change in VAT tax does not change her shopping habits as a UK citizen, she is happy with the decision to remove the additional tax for those with an annual income of over £150,000.
“And it will filter out,” said Waters, who is retired. “It will trickle down to people who don’t pay taxes but may have more money in their pockets than the treasury.”
As a longtime Conservative voter, she said the budget would give her more to spend and give to food banks. “And I hope other people do too,” she added.
While praising other changes, such as the stamp duty, she wishes there had been a bigger windfall tax on energy companies.
“Give them a chance,” she said of the government’s budget plans. “Give them a chance.”
Few heads turned on Oxford Street as Theresa Cladney and Angelique Joseph threw away their shoeboxes, dabbing until the cardboard was small enough to fit in the bin outside Selfridges.
Like many international travelers visiting the high streets of London, shoe designers from the Midwest will soon find that shopping in Britain will cost them less than before.
“I think it would be great, as long as you don’t have to deal with the hassle of the process,” Cladney said, remembering the hours wasted at airports for lower returns than she expected.
“If it was an easy process, like it is in the United States, on that day you are just not taxed and you don’t have to do anything. It’s a matter of convenience ” , she added. “Since everything goes up. It would be nice to see something go down a little bit.
Kwarteng intends to digitize the new system, ending the old pen and paper format.
The reintroduction of a duty-free shopping scheme, previously abolished in 2021 after Brexit, will allow tourists to get a VAT refund on goods bought on the high street, at airports and other points of departure and exported of the United Kingdom on a personal basis. luggage.
The move, which will cost nearly £1.3billion in 2024-25, comes as the pound tumbles to new lows against foreign currencies and the country struggles with its highest inflation rates since four decades.
For Nouria Hafid, who worked for years on Bond Street selling high-end jewelry, the change will not only generate greater returns for the business, but also employee salaries, which are commission-based.
“I think it will be really good because to be honest the tourists are back in London after Covid, they are there, they have money and they want to spend,” said Hafid, 32, who has saw an increase in clientele from the existing US, Chinese and Middle Eastern clientele in London.
“All the luxury comes from foreigners traveling here,” added Hafid, who in the past has seen a loss of customers traveling to France and elsewhere to make VAT-free purchases.
“We had to lower the prices of our products a little to be able to play with the market, but it’s still not enough. We lose money for this.