The UK government is set to end tax-free shopping when travelling to the EU from January 2021, in one of the largest changes to travel retail in a generation.

The government had extended the deadline before the transition to duty-free shopping after a consultation, however from the start of January, international visitors will no longer be able to benefit from VAT relief and tax-free sales.

According to a University of Westminster in 2008, half of the revenue generated by airports comes from commercial revenues and has only increased since then.

Shops in airports directly benefit from tax-free agreements, which explains the increase in lavish shopfronts with structural glass systems stocked with jewellery and other luxury items that can be bought cheaper under the condition that they are not used in the country.

The change, which has been described as a ‘tourist tax” by Heathrow Airport chief executive John Holland-Kaye, would have a significant effect on businesses that rely on tourists entering the country.

The change would make the UK the only country in Europe not to offer VAT-free shopping, although it is possible to order products and have them sent directly to overseas addresses VAT-free.

The replacement duty-free extension would apply to a more limited range of products, with cosmetics, clothing and electronics no longer being VAT-free.

However, there is the potential for alcohol and tobacco, two more traditional duty-free items, to be significantly cheaper with UK excise duty no longer being due.