Without tax free shopping UK is least attractive shopping destination says Burberry chief

Burberry chair Gerry Murphy has accused UK Prime Minister Rishi Sunak of making a grave mistake in removing the VAT refund for foreign shoppers, claiming that it has made the UK the least attractive shopping destination in Europe.

Mr Murphy alluded that tourists can shop tax-free in other cities such as Paris, Milan, and Amsterdam, making the UK unattractive to them. Speaking at the Business Connect conference in London, organised by the government to improve its relationship with business, Murphy challenged Sunak to reconsider his decision.

The savings to the Treasury do not compare to the windfall from shopping tourists

The tax-free shopping scheme allowed overseas visitors to get a 20 percent VAT refund on purchases made in stores and airports. Although it cost the Treasury 2 bilion pounds per year, it was dwarfed by the 28 billion pounds spent by international visitors. Sunak in his statement said he is working every day on the five priorities of halving inflation, growing the economy, reducing debt, cutting waiting lists, and stopping the boats, and that Business Connect provides a fantastic opportunity to demonstrate how the government is growing the economy.

The event was attended by over 200 of the UK’s highest profile CEOs and c-suite business leaders from key growth sectors, including retailers and fashion brands, technology, life sciences, and advanced manufacturing. Murphy stated that leaving the EU has had a significant friction effect on trade, and the removal of the VAT refund for tourists was a spectacular own goal that could be reversed by a decision from the Chancellor or Sunak.

“It is somewhat perverse that on the day that we left the single market, a decision by, I think it was by you as chancellor, to remove the VAT refund for tourists made the UK the least attractive shopping destination in Europe," Mr Murphy said.

“Leaving the EU has had a significant friction effect on trade, hopefully not forever but it is the case it was a drag on growth. So we ask you to look at this specific one (VAT), this is a spectacular own goal, one that can be reversed by a decision from you or from the Chancellor.”

“Business Connect provides the next fantastic opportunity to demonstrate how we are growing the economy. We are bringing together some of the UK’s biggest companies and investors for meaningful dialogue – and I’m a Prime Minister passionate about working with business to unlock opportunity and progress," Mr Sunak said.