// Mulberry to close Bond Street store as Jeremy Hunt scraps VAT-free shopping
// Luxury retailers have claimed the UK’s decision to stop tourists reclaiming VAT has resulted in people travelling to other cities such as Paris and Milan
Mulberry is set to close the doors to its Bond Street store which first opened in 1995.
The luxury fashion retailer has been a victim of the ‘tourist tax’ which means international visitors can no longer claim back 20% VAT in the latest setback for businesses that thrive on foreign shoppers comes after Chancellor Jeremy Hunt pressed ahead with the levy.
The incentive is still on offer in mainland Europe, with experts saying shoppers are now flocking to France and Spain instead.
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A Mulberry spokesman said: ‘The lack of VAT-free shopping in the UK has been particularly felt on Bond Street, which has always been an iconic shopping destination for tourists. The decline in visitors has impacted footfall and sales.’
They added that high rents and business rates have also conspired to make ‘the store commercially unviable resulting in us taking the difficult decision to close’.
Tourists visiting Britain were allowed to reclaim VAT on purchases until January 2021, when the tax break was axed by then Chancellor Rishi Sunak.
Kwasi Kwarteng tried to reintroduce the incentive in his ‘mini-Budget’ but Hunt reversed the decision a month later.
The Treasury claims it will save £2 billion a year – a figure disputed by some economists who think it will actually hit the public purse.
Last year, bosses at both Harrods and Selfridges backed calls for a review of the tax while Kurt Geiger boss Neil Clifford also criticised the UK for scrapping VAT-free shopping for international tourists, saying he was “immensely disappointed” with the decision.
While last month Burberry’s finance chief said demand from foreign tourists in London had bounced back at a much slower rate than in Europe since the pandemic.
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