Over 300 fashion industry leaders urge UK Chancellor to scrap the controversial ‘tourist tax’.

• Business figures highlight the UK as the sole European nation without tax-free shopping.
• The policy is claimed to impede economic growth, costing £11.1bn in lost GDP annually.
• Key political figures across parties support revisiting the VAT rebate policy.
• Retail and tourism experts emphasise the wider economic impact on high streets and regional businesses.

The call for abolishing the ‘tourist tax’ has gained momentum as over 300 CEOs, brand founders, and business leaders have appealed directly to UK Chancellor Rachel Reeves. These leaders describe the policy as a ‘spectacular own goal’, arguing that it places the United Kingdom at a ‘massive global disadvantage’.

Among the noteworthy signatories of this open letter are Andrea Baldo, CEO of Mulberry; Neil Clifford, CEO of Kurt Geiger; and Paul Marsden, head of branch at John Lewis. They voice concerns that Britain, being the sole country in Europe that doesn’t offer tax-free shopping for tourists, is losing out significantly as tourists increasingly favour Paris, Milan, and Berlin for shopping.

The impact of the ‘tourist tax’ extends beyond luxury stores concentrated in London’s West End. The policy affects the entire spectrum of the tourist economy. This includes not just shops on high streets but also extends to regional tourism centres, restaurants, hotels, transport services such as taxis, and cultural institutions like museums.

A report by the Centre for Economics and Business Research further substantiates these claims, concluding that the cessation of the tax-free shopping scheme is deterring approximately two million tourists each year, resulting in a loss of £11.1bn in GDP. This has prompted prominent figures from all major political parties, including the Labour Mayor of London Sadiq Khan, former Conservative chancellors Sajid Javid and Nadhim Zahawi, and Lib Dem leader Sir Ed Davey, to advocate for policy reform.

The letter is not only backed by retail magnates but also by renowned cultural and business entities such as Bicester Village, the Royal Opera House, and Historic Royal Palaces. The signatories are urging Chancellor Reeves to heed their call for action, to leverage every available opportunity to stimulate economic growth and to remove this impediment from UK’s economic strategy.

The unanimous call from industry and political figures highlights the urgent need for policy reevaluation to secure economic wellbeing.