Norway captures UK tourists’ spending as calls grow to reinstate tax-free shopping

Norway’s active VAT refund policies attract more British tourists than the UK, highlighting the economic impact of axing tax-free shopping as industry leaders push for policy reversal to boost post-pandemic recovery.

Norway has emerged as a prime beneficiary of the UK’s decision to abolish tax-free shopping for international visitors, capturing a growing share of tourist spending that might otherwise have flowed into British stores. Steen & Strom, Oslo’s iconic department store often likened to London’s Selfridges, announced a striking 27 per cent increase in tax-free sales to tourists during the first eight months of this year. According to David Wilkinson, executive director at Steen & Strom, many British shoppers are deliberately turning to luxury purchases abroad rather than in London, attributing this shift in part to the UK’s tourist tax policy. In response, the store launched a new refund service for tourists in June to capitalise on this trend. Annette Lund, head of Promenaden which oversees Steen & Strom, confirmed that Norway’s VAT-free shopping offer is resonating strongly with British visitors, many of whom are reportedly choosing continental Europe for their tax-free retail experiences.

This Norwegian success story highlights a broader challenge for the UK retail and tourism sectors. Government data from the Office for National Statistics shows that both inbound visits and tourist spending in the UK remain below pre-pandemic levels, while other European countries enjoy a resurgence in tourist numbers and spending. More than 500 UK business leaders have rallied behind a campaign, supported heavily by the Daily Mail, calling for the reinstatement of tax-free shopping to help revive tourism and retail trade. Retail giants including Harrods, Primark, Marks & Spencer, and luxury brands such as Burberry and Mulberry, are among those advocating for this policy reversal. Before it was scrapped in 2021, non-EU visitors to the UK could reclaim 20 per cent VAT on their purchases, a perk that the UK government claims would now apply to a wider group of tourists, including EU residents, following Brexit.

Industry observers highlight that reinstating tax-free shopping could make the UK uniquely attractive among European destinations, offering VAT rebates to approximately 450 million EU customers alongside wealthy tourists from markets like China and the United States. Such a move could provide a much-needed boost to retailers struggling in the face of rising costs and subdued consumer spending. Retail sector leaders have also expressed concern over potential further tax increases on businesses amid the Chancellor’s budgetary challenges. The chief executives of major UK retailers like Sainsbury’s, Tesco, John Lewis, Boots, and Currys recently warned the opposition’s shadow Chancellor Rachel Reeves about the damage additional business taxes could cause, noting that measures introduced in the previous budget had already imposed £7 billion in costs on firms.

By contrast, Norway actively encourages tax-free shopping for international visitors as a deliberate tourism and retail strategy. Official Norwegian tourism guidance explains that non-EU residents can claim VAT refunds on purchases made in Norway, provided they meet minimum purchase amounts and follow documented procedures. This approach positions Norway as an attractive shopping destination, offering a wide selection of high-quality and unique goods. The UK government’s official site similarly outlines its previous VAT refund scheme for tourists, which required purchases to be exported within three months and adherence to detailed eligibility rules. However, this scheme was withdrawn in 2021 despite wide calls for retention or reinstatement.

British retailers and business groups have consistently urged the government to reconsider, warning that the absence of a tax-free shopping scheme has disadvantaged the UK’s retail sector compared to continental competitors. Reports from outlets like The Guardian reflect recent moves by the government to reinstate tax-free shopping for non-EU residents, signalling acknowledgement of the potential benefits for tourism and retail sales. Meanwhile, media coverage from the BBC and Retail Gazette points to how the current UK policy has shifted international shopping patterns, with tourists favouring countries like Norway that continue to offer VAT refunds. These accounts underscore the competitive disadvantage faced by UK retailers, alongside calls for urgent policy changes to stem the loss of tourist spending abroad.

As the UK government prepares its upcoming Budget, retail leaders are watching closely to see whether tax-free shopping will be reinstated—a measure many believe is crucial for boosting post-pandemic economic recovery in tourism and retail sectors. Until then, the flow of British tourists spending on the Continent, exemplified by strong sales in Norwegian luxury stores, is set to continue, underscoring the economic consequences of the UK’s current policy stance.

📌 Reference Map:

• Paragraph 1 – ^[1], ^[2], ^[3], ^[6]
• Paragraph 2 – ^[1], ^[2], ^[6], ^[7]
• Paragraph 3 – ^[1], ^[7], ^[5]
• Paragraph 4 – ^[1], ^[3], ^[4]
• Paragraph 5 – ^[1], ^[5], ^[6], ^[7]

Source: Noah Wire Services

Noah Fact Check Pro

The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.

Freshness check

Score:
7

Notes:
The narrative presents recent developments regarding Norway’s tax-free shopping and its impact on UK retailers. The earliest known publication date of similar content is from August 2023, highlighting the ongoing nature of this issue. The report includes updated data but recycles older material, which may justify a higher freshness score but should still be flagged. Additionally, the narrative references a press release, which typically warrants a high freshness score.

Quotes check

Score:
6

Notes:
The report includes direct quotes from individuals such as David Wilkinson and Annette Lund. A search reveals that similar quotes have appeared in earlier material, indicating potential reuse. Variations in wording are present, but the core message remains consistent. No online matches were found for some quotes, suggesting potential originality or exclusivity.

Source reliability

Score:
5

Notes:
The narrative originates from the Daily Mail, a reputable UK newspaper. However, the report includes references to a press release, which may affect the overall reliability. Additionally, the report mentions a person, David Wilkinson, whose online presence is limited, raising questions about the verifiability of the information.

Plausability check

Score:
8

Notes:
The claims regarding the impact of the UK’s tourist tax on Norwegian luxury stores are plausible and align with previous reports. The narrative includes supporting details from reputable outlets such as the BBC and Retail Gazette, enhancing its credibility. The language and tone are consistent with the region and topic, and the structure focuses on relevant details without excessive or off-topic information.

Overall assessment

Verdict (FAIL, OPEN, PASS): OPEN

Confidence (LOW, MEDIUM, HIGH): MEDIUM

Summary:
The narrative presents plausible claims supported by reputable sources. However, the inclusion of a press release and references to individuals with limited online presence raise concerns about the originality and verifiability of some information. The presence of recycled content and potential reuse of quotes further complicate the assessment.