Selfridges, Chanel & Bicester Village warn £1bn could be lost in investment on back of tax-free shopping cut

Selfridges, Chanel and Bicester Village warn £1bn could be lost in investment on back of VAT relief cut
Luxury firms warn the Government over knock-on effects of ending tax-free shopping.
//  Luxury brands warn government over loss of investment in wake of cuts to tax-free shopping
// Selfridges, Chanel, Burberry & Bicester Village owners Value Retail among those warning of impact from end of VAT relief for tourists

Some of the UK’s best-known luxury brands have warned the government that cutting the VAT relief for tourists could result in £1 billion of lost investment, according to The Financial Times.

Selfridges, Chanel, Burberry and Bicester Village parent company Value Retail were among the companies that have warned the UK Government in recent weeks over the Treasury’s decision to end tax-free shopping for international visitors.

Representatives from a number of luxury companies held meetings with officials in Downing Street and the Treasury in recent weeks, according to a person close to the talks cited by The Financial Times.

READ MORE: 50,000 jobs at risk if Treasury scraps tax-free shopping

It’s here that concerns over risks to future investments were raised, with executives at 17 luxury and retail companies providing estimates over capital expenditure totalling £1 billion for periods between 18 months to five years.

“Most of the businesses have privately shared information with the Treasury in meetings and warned that this will be the outcome if the policy is introduced,” the person told The Financial Times.

“Duty-free is a high volume business so refurbishments generally take place more frequently than in other parts of the retail sector.”

Mulberry, Hermes, Longchamp and Jimmy Choo also warned over the potential impact on their capital expenditure plans.

Last week Conservative MPs reportedly warned Chancellor Rishi Sunak that axing duty-free shopping could result in up to 50,000 job losses.

More than 40 MPs said the Chancellor’s decision to scrap the system next year will make the UK “less attractive” to international visitors.

Click here to sign up to Retail Gazette’s free daily email newsletter


Please enter your comment!
Please enter your name here