M&S Chairman Archie Norman said the decision to move away from duty free shows «a lack of clarity about where the UK should compete.» Photo : Adrian Brooks/Imagewise
British tourist tax has left Heathrow with empty shops that it is struggling to fill, the airport said, as pressure builds on Rishi Sunak to stop his raids on travelers.
Eighteen stores, including those owned by British luxury designer Mulberry, jewelery company APM Monaco, watch company Rolex and currency exchange company Travelex, have been closed «in direct response» at the UK's largest airport, it said. 34; to tax.
Seven stores that have remained empty are not yet filled with new businesses, and the airport said the tourist tax has «constantly been raised as a barrier to investment and entry to Heathrow.»
It came from city grandee Archie Norman. criticized the government's decision to end duty-free shopping for tourists. He said the decision showed that «there is no clear vision of where the UK should compete.»
Mr. Norman, Chairman of Marks & Spencer and a former Conservative MP told the Telegraph: «Most people would say the UK should aim to become a hub for fashion, luxury goods, art [and] heritage products, as this is an area in which the UK has a natural competitive advantage.
«In this context, it makes no sense to gift trade elsewhere.»
Rishi Sunak phased out VAT-free shopping for foreign visitors in 2021 when he was Chancellor, arguing the change would save £2bn a year and have a limited impact on spending.
Retailers, however the politics are said to have brought wealthy tourists to other places. In recent weeks, executives at Burberry, Harrods and Selfridges have said shoppers are leaning towards other European cities such as Paris and Madrid, where VAT exemptions still apply.
The numbers show US spending. Tourist numbers in France and Spain have more than tripled this year compared to the same period in 2019. Spending in the UK grew by just 1 percent over the same period, according to Global Blue.
Tourism lags behind
Heathrow stated that the tourist tax had resulted in a «multi-million pound drop in sales» at the airport. 99% of the shops and restaurants at the airport were in use before the Covid-19 pandemic, but today that level is just 95% and Heathrow blames the tourist tax for making it hard to bounce back.
The airport warned that The UK is now seen as a less attractive proposition for retailers looking to invest.
Tom Atron, CEO of Fortnum & Mason, which has a store in Heathrow's Terminal 5, said the impact will only worsen with the Paris Olympics next year.
He said: “If we move forward 12 months, I think we will see the result [of the tourist tax]. If we do nothing, we will find that the UK and London have become less competitive compared to other places across Europe.»
Mr Norman said: «It's hard to guess what the government behind tourism is thinking. tax. But I'm guessing that some scholar calculated that the Treasury would recover more of the fee waiver than it would lose by diverting tourist spending elsewhere.
“I don’t know if this is true in the short term, but it probably misses the long term value of building a successful business in the UK and bringing the most valuable tourists to the UK.
“It’s not just Harrods and Fortnum that are affected. , the impact on M&S at Marble Arch and High Street Kensington is noticeable, and I'm sure small specialty merchants and fashion boutiques have been affected across the country.»
Last month, executives at 20 airports, including Gatwick, Edinburgh , Belfast and Exeter have joined UK calls for a VAT refund.
A government spokesman said shopping is now open to all non-UK visitors who buy items in the store and have them shipped directly to their overseas address.
«Extending the scheme to EU citizens could cost UK taxpayers around £1.4bn a year, meaning taxes would have to be increased to pay for it, while we have already taken difficult decisions to reduce debt.”
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