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Mulberry chief calls for ‘tourist tax’ to be scrapped as London brands “suffering” as shoppers go elsewhere

Fresh calls have been made to reinstate VAT-free shopping for international tourists, after the chief of Mulberry warned its profits have been hit hard by it as they ditch London for Paris and Milan.

Pre-tax profit at the British handbag maker fell to £13.2m in the year to April, down from £21.3m the prior year.

Thierry Andretta, boss of the luxury fashion brand, has been vocal in recent years about the damage the removal of the offer has had on the sector, telling the Evening Standard, on today he had “no doubt” that the abolition impacted its profits.

“There is no doubt that the lack of VAT-free shopping has impacted our UK performance, and we, along with other British brands, are suffering the consequences of this,” the chief said.

Rishi Sunak scrapped the tax which saw international shoppers to claim 20 per cent back with their purchases – it was largely popular with wealthy tourists who would travel to London to splurge on designer goods.

As international tourism picks up post Covid-19, concerns are growing that the removal of the scheme will send international travellers to choose elsewhere when planning a foreign shopping trip.

Dee Corsi, chief executive at the New West End said that the “tourist tax” is a drag on the economy, “undermining the home advantage of great British brands”.

“Data from VisitBritain shows nearly half of long-haul travellers see shopping as one of their priorities. The West End and its retailers have been recovering strongly since the pandemic, but until this misguided tax is removed we’ll be letting opportunity slip through our fingers.”

Members of the House of Lords also warned last month that International tourists are spending more in Europe than in the UK. 

“US tourists who are going to France, Spain and Italy are spending at the rate of three times what they did in 2019… our retailers are really struggling and they need and they deserve a level playing field,” Baroness Elizabeth Doocey said at the time.

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Mulberry chief calls for ‘tourist tax’ to be scrapped as London brands “suffering” as shoppers go elsewhere

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