End of VAT-free shopping 'driving visitors to Paris and Milan', says Kurt Geiger boss

Chancellor Jeremy Hunt’s so-called tourist tax is driving shoppers to Paris and Milan, leaving Britain at a disadvantage, according to the boss of Kurt Geiger.

Neil Clifford said he was ‘immensely disappointed’ when the UK gave up VAT-free shopping for international tourists.

The 55-year-old, who has run the British fashion house for 19 years, said post-Brexit Britain should be ‘open to the world’. 

But by being the only Western country to slap foreign shoppers with VAT on their purchases, we are driving visitors away.

And alarmingly, Clifford said British shoppers are now visiting European countries to take advantage of the tax break – piling further pressure on shops, pubs, bars and restaurants in the UK.

Tourists from overseas were allowed to reclaim the 20 per cent VAT on their purchases in the UK until January 2021, when the tax break was scrapped by then-chancellor Rishi Sunak. 

Kwasi Kwarteng made moves to reintroduce the incentive in his September ‘mini-Budget’. 

Hunt quickly reversed the plan, claiming the decision would save the Government £2billion a year. 

But critics said Hunt’s U-turn was a ‘hammer blow’ to tourism and high streets, and would cost more in lost tax income elsewhere.

Research by leading forecaster Oxford Economics found Hunt would raise an extra £350million a year in tax revenues by reinstating the measure. 

A separate analysis shown to the Government showed the tax could mean the loss of up to 138,000 job losses in the UK.

Clifford told the Daily Mail: ‘I was immensely disappointed VAT-free went in the first place. It was a bad decision.

‘The fact it is cheaper for a British consumer to go to Paris to buy a Louis Vuitton handbag is disappointing.

‘We are such a brilliant country to visit, but you would hope we are on a level playing field for pricing for retail, and the disappointing thing is we are not.’