Over 300 leaders in fashion and retail urge Chancellor Reeves to abolish the ‘tourist tax’.
- The UK stands as the sole European nation without a tax-free shopping provision for tourists, disadvantaging local businesses.
- Notable figures have signed an open letter, including CEOs from Mulberry, Kurt Geiger, and the British Fashion Council.
- The absence of tax-free shopping is reportedly deterring two million tourists annually and costing the UK economy £11.1 billion.
- Industry leaders from all political spheres support the call for reform to boost economic growth.
More than 300 chief executives, brand founders, and business leaders have jointly signed an open letter addressed to Chancellor Rachel Reeves, pressing for the elimination of the so-called ‘tourist tax’. This policy has positioned the United Kingdom as the only European country not offering tax-free shopping to tourists, a situation believed to place British businesses at a substantial global disadvantage.
Prominent figures such as Andrea Baldo, CEO of Mulberry, Neil Clifford, CEO of Kurt Geiger, and Caroline Rush, CEO of the British Fashion Council, have lent their voices to this cause. They argue that the withdrawal of the VAT rebate has resulted in tourists opting for shopping destinations in cities like Paris, Milan, and Berlin over the United Kingdom.
The letter emphatically describes the ‘tourist tax’ as a ‘spectacular own goal’ for the UK economy. It highlights how the repercussions extend beyond luxury stores, affecting regional tourist centres, supply chains, local businesses such as hotels and restaurants, and even cultural institutions like galleries and museums.
According to research conducted by the Centre for Economics and Business Research, the elimination of tax-free shopping has not only deterred approximately two million tourists each year but has also inflicted an £11.1 billion loss on the UK’s Gross Domestic Product (GDP).
The movement to scrap the ‘tourist tax’ finds support from across the political spectrum, including Labour Mayor of London Sadiq Khan, former Conservative chancellors Sajid Javid and Nadhim Zahawi, and Liberal Democrat leader Sir Ed Davey. Business leaders stress the urgency for Chancellor Reeves to heed these calls, emphasising the need to boost the nation’s economic growth.
The widespread consensus among industry leaders and political figures reflects a critical need for policy reform to reinstate tax-free shopping in the UK.
