The bosses of some of the world’s leading names in luxury retailing, including Chanel, Longchamp, Paul Smith, Harrods and Selfridges, have warned the Chancellor that ending tax-free shopping for tourists will cost 40,000 British jobs and £1 billion of investment.
In a letter to Rishi Sunak, who axed the 20 per cent discount for foreign visitors, more than 20 business leaders urged him to reconsider before it comes into effect at the end of the year.
It is hoped the number of tourists visiting London in 2021 will soar after the UK today become the first country to have a clinically authorised vaccine.
Retailers and luxury brands had hoped that the perk, which allowed non-EU tourists to make big savings on their shopping in London and elsewhere in Britain, would be extended to visitors from Europe once Brexit is fully implemented.
Instead the Treasury scrapped it, claiming that it was “a costly relief” that mainly benefited London. Business leaders have said the move could do more harm to the West End than Covid and Brexit combined by driving away high-spending foreign tourists, particularly those from China.
The potential for damage to London by driving visitors to rival cities such as Paris and Milan was highlighted in the Standard yesterday.
In their letter today, highly respected figures such as Michael Ward, the managing director of Harrods, Ewan Venters, the chief executive of Fortnum & Mason, Godfrey Davies, the chairman of Mulberry, and Anne Pitcher, the managing director of Selfridges, said the tax benefit, officially known as the VAT Retail Export Scheme, was “an integral part of the UK’s attractiveness as a shopping destination”.
They added that it “supports businesses and jobs throughout the UK — providing a strong bedrock for the Government’s levelling-up agenda”.
Helen Brocklebank, chief executive at luxury brands business group Walpole, which organised the letter, said: “My message to the Chancellor couldn’t be clearer or more important.”
A Treasury spokesman said: “Around 92 per cent of visitors to the UK don’t use the VAT Retail Export Scheme and tax-free shopping is still available in store when goods are posted to overseas addresses.”