Britain losing out on tourism's high spenders

Abolition of tax-free shopping leads to loss of revenue for luxury goods companies

- Jonathan Eyal

LONDON The head of a British luxury fashion house has warned that the lack of tax-free shopping for tourists visiting Britain is holding back sales and putting the country at a disadvantage to its European neighbours.

Mr Jonathan Akeroyd, chief executive of Burberry - best known for its raincoats, apparel and accessories bearing the company's signature check pattern - said sales to tourists visiting Britain had risen by 19 per cent in London in the first three months of 2023.

Meanwhile, sales in Paris tripled, and went up by almost half in other key European cities.

Mr Akeroyd, who blamed weaker British sales figures on the absence of a tax refund scheme for tourists, said the matter "leaves the UK at a competitive disadvantage for global shoppers".

The complaints from Burberry's boss echo those of leaders of many other British luxury manufacturers, who are all appealing to their government to reinstate previous tax-free arrangements.

But the British Finance Ministry rejects these demands, saying that tourists will continue to visit the country even if they cannot expect tax-free sales.

International visitors to the United Kingdom used to be able to reclaim the general sales tax- or value-added tax (VAT), as it is known locally provided that the goods they bought were above a specific value and were taken intact out of the country.