The UK’s ‘tourist tax’ policy is facing criticism from top fashion and business leaders.
- Over 300 influential figures have signed an open letter addressing Chancellor Rachel Reeves.
- This policy, introduced in 2021, is seen as a disadvantage for UK businesses compared to its European counterparts.
- The open letter highlights the economic impact and calls for the reversal of the tax-free shopping policy.
- Renowned leaders from various sectors have unified in urging the government to boost economic growth by scrapping this tax.
The implementation of the ‘tourist tax’ in the UK has spurred significant backlash from key figures in the fashion and business sectors. More than 300 CEOs, brand founders, and industry leaders have unified in opposition, citing it as a substantial setback for British businesses. Among the signatories are notable names such as Andrea Baldo from Mulberry, Neil Clifford from Kurt Geiger, and Paul Marsden from John Lewis, who collectively assert that this policy places the UK at a profound global disadvantage.
Introduced by former Chancellor Rishi Sunak in 2021, the ‘tourist tax’ eliminated VAT rebates for visitors, a move described in the letter as a ‘spectacular own goal’. Signatories argue that reversing this decision is crucial if the government is, as claimed, serious about fostering stronger economic growth.
The letter sheds light on the policy’s far-reaching effects, discrediting the notion that it only impacts London’s luxury retailers. Instead, it asserts that UK shoppers are increasingly choosing destinations like Paris, Milan, and Berlin, where tax-free shopping remains available, thereby affecting the entire tourist economy. This includes regional tourist centres and extends to the broader supply chain, touching hotels, restaurants, taxis, galleries, museums, and cafes.
Significant economic consequences have been highlighted, with reports from the Centre for Economics and Business Research indicating the loss of approximately two million tourists annually, costing the UK economy £11.1 billion in GDP. There’s a call for Chancellor Reeves to heed voices from across political spectrums, including Labour’s Sadiq Khan and Conservative’s Sajid Javid, to take corrective action.
Renowned establishments such as the Royal Opera House, Shakespeare’s Globe, and Historic Royal Palaces are among the letter’s signatories, demonstrating widespread opposition to the ‘tourist tax’. There is a strong appeal to the Chancellor to acknowledge the business community’s consensus and utilise every opportunity to drive growth.
The collective voice of industry leaders underscores the urgency for the UK government to reconsider the ‘tourist tax’, advocating for policies that will enhance economic performance.
