Yahoo Finance Why are some of London’s wealthiest business owners protesting?
A number of London’s most high profile retailers and business owners took to the streets of luxury shopping district Savile Row this morning to protest against the government’s controversial ‘tourist tax’.
Founder of luxury hotel group Rocco Forte Hotels, Sir Rocco Forte, was in attendance alongside a slew of other leading retail figures including Anda Rowland, director of tailors Anderson & Sheppard.
The hotelier said there are two million less tourists visiting London since the government removed VAT free shopping for international tourists.
Writing in City A.M. this morning, the millionaire said that “it takes quite a lot to persuade me to take to the streets”.
He said: “[Today] we will be highlighting Rishi Sunak’s decision to scrap the traditional VAT rebate on shopping by foreign tourists, which has prompted a fierce backlash from politicians from all parties.”
Economic analysis by the Centre for Economics and Business Research found the tourist tax is costing the UK £10.7bn in lost GDP as more and more international tourists flock to the likes of Milan and Paris when choosing a luxury shopping holiday.
Speaking at the protest today, chief executive of the British Fashion Council, Caroline Rush, said the government does not realise how much small businesses are being impacted since the removal of VAT free shopping.
“It’s also the small independents who rely on international tourists, as some of their biggest customers,” she said.
Some 400 business leaders have now signed an open letter to the chancellor calling for the tax break – which is still available in every country in the EU – to be reinstated.
Anda Rowland, director of Anderson & Sheppard, a popular tailors on Savile Row, said that British retailers have “depended” for decades on the trade generated by overseas visitors who could come here and claim a VAT rebate on their shopping.
“Now all that has been brought to an end by the Treasury, and our rivals in Milan, Paris and Berlin – where tax-free shopping is still offered – are now far more competitive than we are.”
An HM Treasury spokesperson said: “VAT-free shopping does not directly benefit Brits – it lets foreign tourists who buy items in the UK claim back VAT as they return home.
“The scheme could cost British taxpayers around £2bn a year, which is money we would need to find elsewhere to help fund. Furthermore, fewer than one in ten non-EU visitors used the previous scheme, showing it’s not a significant attraction for tourists.”
