The withdrawal of tax-free shopping facilities for tourists in the UK has impacted the sales of many luxury brands, as tourists now shop elsewhere in the European Union. This has forced brands to close some prestigious stores in London.
After its exit from the EU, the British government withdrew VAT-free shopping for tourists visiting Britain. This deprived the international visitors of claiming back 20 percent VAT while leaving the country.
The boss of Jigsaw Beth Butterwick called Britain the “black sheep” of Europe for withdrawing from offering tax-free shopping incentives. She said London was being left behind as tourists turn to Paris, Madrid, and Milan to shop instead.
European countries have put competitive financial incentives in place to lure international shoppers. The UK is the black sheep,” she said. She is not alone in protesting many luxury retailers slam the move. Mulberry has decided to close its Bond Street store as sales dipped as tourists skip shopping. Even, Harrods was forced to swap some of its most expensive handbags with £250 versions in airport shops as it said the removal of the tax-free scheme had deterred wealthy overseas customers.
Meanwhile, the data from the Centre for Economics and Business Research (CEBR) revealed the “tourist tax” is costing the UK £10.7bn in lost GDP and has put off two million tourists from visiting the UK per year.
Fashion retail sales dip in the UK after the withdrawal of tax-free shopping for tourists
