Campaigners Urge UK to Scrap 'Tourist Tax' to Capitalize on Music Tourism Boom

Campaigners are urging the UK to reinstate tax-free shopping for tourists, arguing that the absence of this initiative is costing the economy millions as international music fans increasingly choose to spend their money in European cities like Paris, Milan, and Berlin.

Prior to its abolition in 2021, the VAT-free shopping scheme allowed non-EU tourists to claim a tax refund on purchases made in the UK. Its removal has led to a situation where the UK economy is not fully benefiting from the influx of visitors drawn by major music artists. This is particularly relevant as artists increasingly opt for residency-style shows in London, attracting global audiences for multiple dates.

The number of music tourists in the UK reached a record 24.7 million last year, a 4.8 percent increase from 23.5 million in 2024. This surge was partly attributed to major tours such as the Oasis reunion and Dua Lipa's concerts. Major artists like Harry Styles have also been selecting London for extended runs of shows.

"Major music residencies featuring artists such as Harry Styles and Ariana Grande represent a huge opportunity for London and the wider UK economy, bringing international visitors who spend money not just on tickets and hotels, but across our shops, restaurants and attractions," said Ros Morgan, chief executive of the Heart of London Business Alliance (Holba).

Tourism officials have expressed concerns that a proposed overnight visitor levy could further diminish the UK's competitiveness. Morgan added, "The UK should be making it easier, not more expensive, for international visitors to come here, enjoy our world-class entertainment and spend money in our economy. Otherwise, fans could increasingly follow artists such as Céline Dion to Paris or elsewhere, taking their spending with them."

According to a report by the Centre for Economics and Business Research, commissioned by Holba, reinstating the tax-free shopping scheme could generate billions in additional economic output and provide a net gain of £2.6 billion to the Treasury. Dee Corsi, chief executive of New West End Company, noted that tourists attending concerts in London often extend their trips to shop, dine, and stay in hotels, citing a 15% increase in footfall on Oxford Street during the British Summer Time Festival.

Businesses in Paris are reportedly anticipating substantial gains from Céline Dion's 16-show residency, with one department store executive expecting a significant positive impact on sales. The "Scrap the Tourist Tax" campaign, supported by over 500 firms including luxury brands and shopping center owners, argues that the benefits of increased tourism outweigh the costs of refunds. They also highlight the potential to attract EU visitors if the scheme were restored, making the UK the only major European destination offering VAT-free shopping to both EU and non-EU travelers.