Fashion CEOs join call to scrap ‘tourist tax’

Retail bosses - including Andrea Baldo, CEO at Mulberry; Neil Clifford, CEO of Kurt Geiger, and Paul Marsden, John Lewis head of branch – have added their names to the letter, saying the UK is now the only country in Europe that does not offer tax-free shopping to tourists, “leaving British businesses at a massive global disadvantage”.

The letter states: “What has become known as the ‘tourist tax’ has turned into a spectacular own goal for the UK.”

The signatories tell the Chancellor that "if she is serious about promoting stronger economic growth", she must reverse the position, which was introduced in 2021 by then Chancellor Rishi Sunak.

The letter has also been signed by industry figures such as Caroline Rush, CEO of the British Fashion Council, and Helen Dickinson, CEO of the British Retail Consortium.

“This does not just affect a few luxury stores in London’s West End, as some have claimed. People are increasingly choosing to shop in Paris, Milan and Berlin rather than here because the VAT rebate has gone,” the letter states.

“The entire tourist economy is affected, whether that be regional tourist centres or manufacturers down the supply chain, hotels and restaurants, taxis, galleries and museums, cafes. The list is endless. Every high street is seeing the impact.”

The letter comes after the Centre for Economics and Business Research concluded the removal of tax-free shopping is deterring two million tourists a year and costing £11.1bn in lost GDP.

It also states senior figures from all three main parties - including Labour Mayor of London Sadiq Khan, former Conservative chancellors Sajid Javid and Nadhim Zahawi and Lib Dem leader Sir Ed Davey - have called for reform.

“You now have a chance to show that you are listening to the voice of business and pulling every available lever to promote growth,” the letter states.

“We urge you to take decisive action, scrap the tourist tax and boost economic growth.”

Other signatories include Paul Smith, Bicester Village, the Royal Opera House, Shakespeare’s Globe, Historic Royal Palaces, Chapel Down, Charlotte Tilbury Beauty, Fortnum & Mason and Claridge’s.