The cessation of tax-free shopping for tourists has significantly impacted the UK’s high street businesses. Neil Clifford, CEO of Kurt Geiger, highlighted this pressing issue, noting its far-reaching negative effects.
Neil Clifford, Chief Executive of Kurt Geiger, has publicly criticised the UK’s decision to terminate tax-free shopping for international tourists. Speaking to The Times, Clifford remarked on the ‘massively negative effect’ on Britain’s retail sector since the end of VAT-free shopping. He pointed out that tourists from the Middle East and America are now spending less time in London. ‘If you go to Milan or Paris or Madrid – my team and I are in those markets often – there’s no doubt they’re busier,’ he noted.
The scheme, abolished at the beginning of 2021, previously allowed visitors to reclaim 20% of their purchase price. This benefit, now lost to shoppers in the UK, has redirected tourists towards other European destinations where they can still take advantage of better deals. Clifford also observed an increase in visitors coming to London only to browse before making their purchases elsewhere in Europe.
Clifford explained that this change had an immediate and still ongoing negative impact across the UK. ‘It really affected London, but actually right across the UK we saw that negative impact almost immediately. It is still having a massively negative effect,’ he stated. He further commented on the need for a boost in the UK retail sector following various challenges over recent years.
Business leaders from diverse sectors have also condemned the removal of tax-free shopping, often termed the ‘tourist tax’. Their criticisms highlight the broad opposition to this policy among the business community.
London’s Mayor Sadiq Khan has also advocated for reinstating tax-free shopping. He argued that it would likely increase international tourism, providing a vital economic boost to UK businesses and the high street.
The performance of Kurt Geiger’s flagship store on Oxford Street, London, exemplifies this success. The 3,000 sq ft store, launched in October, has exceeded all sales expectations, becoming the brand’s top-earning site.
The termination of tax-free shopping for tourists has undeniably impacted the UK high street. Business leaders like Neil Clifford call for immediate policy reconsiderations to revive the retail sector.
Reintroducing the VAT reclaim scheme could provide substantial economic benefits, enhancing international tourist spending and offering a much-needed boost to UK businesses.