MIAMI – London Heathrow Airport (LHR) could lose 2,000 retail jobs because of the British government’s decision to not offer tax-free shopping for tourists, London newspaper The Guardian reports today

LHR’s CEO John Holland-Kaye told the newspaper that “the move, which will make the UK the only country in Europe to have a ‘tourist tax’ on international visitors, could be the ‘final nail in the coffin’ for many struggling businesses in the retail and hospitality sectors.”

Holland-Kaye also stated that “the industry needed government support including full business rates relief for all UK airports and abandoning the ‘tourist tax.'”

London Heathrow aerial view. Photo: Heathrow airport

Falling Traffic, Losing Number 1 Spot in Europe

Under new tax rules being introduced by the finance minister, Rishi Sunak, visitors to the UK will no longer be able to benefit from tax-free sales and VAT relief on goods purchased in the country starting January 1.

British authorities said that continuing to offer tax-free shopping is too expensive to manage, and that “retailers who offer the service are putting other high street retailers at a competitive disadvantage,” the report stated. Major UK retailers, such as Marks & Spencer, have shown opposition to the measure.

Passenger traffic at Heathrow fell by 88% in November as travel restrictions and a second coronavirus lockdown in the UK took their toll. Cargo services also fell during that month. 

Due to current forecasts and the decline in passenger traffic, LHR, per the report, “had decided that Terminal 4 would remain nonoperational until the end of next year.”

The airport has also partnered with British Airways (BA), American Airlines (AA), United Airlines (UA) and Virgin Atlantic (VS) to develop a way to eliminate the quarantine for international arrivals, by increasing pre-arrival testing and proving the effectiveness of such initiative.

Photo: LHR

Airport Workers Preparing to React

“Heathrow is facing strike action by workers this month over ‘fire and rehire’ plans that have cut the wages of long-serving staff, in an increasingly bitter dispute,” the report stated.

In October, Paris Charles de Gaulle (CDG) overtook Heathrow’s spot and became Europe’s busiest airport in passenger traffic.

Featured image: London Heathrow Airport Terminal 5. Photo: Pascall Watson.