Burberry CEO Joshua Schulman has called on the UK government to bring back VAT-free shopping for international visitors, saying it could help Britain reclaim its status as Europe’s top shopping destination.
The VAT refund scheme, scrapped in 2021 following Brexit, allowed overseas shoppers to reclaim 20% VAT on purchases made in the UK.
Schulman told The Times the lack of this perk means international consumers are “still not shopping in the UK to the extent that we would like”.
He described the scheme’s return as “a real lever for growth” and a “great opportunity for the UK to become the No 1 shopping destination in Europe”.
Schulman argued reinstating VAT-free shopping would benefit luxury brands and the wider retail sector, which have struggled to compete with European rivals who continue to offer such schemes.
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Burberry has posted signs of stabilisation after a difficult period, with retail revenue falling 6% to £43m in the 13 weeks to 28 June.
Comparable store sales were down just 1%, an improvement on the 21% decline seen a year earlier. Growth in the Americas and EMEIA helped offset weakness in Greater China and Asia Pacific.
Schulman, who joined Burberry last year and launched the “Burberry Forward” turnaround plan, highlighted progress in appealing to younger luxury consumers and strengthening key product categories such as outerwear and scarves.
Despite ongoing macroeconomic challenges, Schulman remains optimistic. He said: “Although the external environment remains challenging and we are still in the early stages of our transformation, we are encouraged by the initial progress we are starting to see.”
The UK government has so far resisted calls to reinstate the VAT scheme, citing concerns about the cost to the exchequer.
A Treasury spokesperson recently reiterated there are “no plans to introduce a new tax-free shopping scheme in Great Britain” but highlighted ongoing efforts to boost tourism through a forthcoming national visitor economy strategy.
Industry groups including Walpole, the body representing the UK luxury sector, have criticised the decision to scrap the VAT refund scheme, describing it as “crazy” and “wrong-headed”.
Many argue reinstating it would be a significant boost for the high street, tourism, and luxury retail.
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