The Lake District is missing out on spending from overseas visitors due to the hated tourist tax, business leaders say

• Lib Dem MP says government’s tax refund incentive view is ‘absolutely bonkers’
• Read more: Minister breaks cover and calls for ‘tourist tax’ to be scrapped 

The Lake District is missing out on sorely-needed spending from affluent overseas visitors due to the hated tourist tax, tourism businesses have said.

It is not just London being afflicted by the absence of VAT-free shopping scheme, according to businesses in north-west England.

Liberal Democrat MP for Westmorland and Lonsdale Tim Farron, called the Government’s refusal to introduce the tax refund incentive ‘absolutely bonkers’.

His comments echoed those of more than 40 Tory MPs and peers, as well as around 200 business chiefs – including Marks & Spencer, Harrods and Burberry – who have urged the Chancellor to ditch the levy.

Leisure businesses based in the Lake District said overseas visitors were swerving the UK in favour of picking up cheaper goods in Paris or Milan.

A sheep grazes on pasture land by Grasmere, Ambleside, in the Lake District 

Stacey McShane, chief operating officer at The World of Beatrix Potter Attraction, based at the children’s museum in Bowness-on-Widermere, said: ‘Not being able to claim back VAT on goods purchased in the UK has definitely had an impact on sales at our attraction shop.’

International tourists will often plan a few days in London before visiting scenic parts of the UK such as the Lake District, Edinburgh and the Cotswolds.

Jen Cormack, sales and marketing director at Windermere Lake Cruises said: ‘In the absence of tax-free shopping for international visitors, the allure of destinations like London and the UK as premier shopping destinations has waned, casting a shadow over regions outside of capital cities, like the picturesque Lake District.’

She said visitors had been left ‘with a bittersweet sense of missed opportunities’ while businesses ranging from hotels to transport providers to restaurants were afflicted.

‘The impact reverberates through the UK and all regions, where the charm of retail therapy once added a vibrant thread to international visitors’ experiences.’

Liberal Democrat MP for Westmorland and Lonsdalem Tim Farron, said: ‘It’s absolutely bonkers that the Chancellor is refusing to reinstate duty-free shopping for visitors.’

Businesses in his constituency had ‘battled through years of the pandemic, and are now dealing with rising bills and a huge staffing crisis’ and now ‘desperately need more support from the Government’.

‘Instead they are being hammered by the Government’s cloth-eared decision. They must scrap the tourist tax today and support Britain’s second biggest visitor destination.’

Liberal Democrat MP Tim Farron, called the Government’s refusal to introduce the tax refund incentive ‘absolutely bonkers’

Before Covid, around 10 per cent of visitors to the rural destination were international, but this dropped to just 1 per cent in 2021 and recovery has been slow, crawling up to 3 per cent in 2022, according to tourist board Cumbria Tourism.

Gill Haigh, managing director at Cumbria Tourism said: ‘We know that our international visitor spend is significantly higher than domestic visitor spend so it is hitting both volume and value and, in a place like Cumbria, where the majority of businesses are independently owned, this impact is keenly felt and hindering recovery.’

Their pleas come just days after government minister Paul Scully, broke cover and admitted ‘hundreds of millions of pounds’ is lost in revenue because shoppers are choosing to go to European cities rather than London.

He said while some people view it as ‘big shops getting a tax rebate’, he believes it will bring in ‘hundreds of millions pounds of lost revenue to this country’.

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