Britain 'shoots itself in the foot' with tourist tax, says Battersea power plant chief

Simon Murphy is the latest high-profile businessman to call on Rishi Sunak to abolish the tourist tax. Photo: Heathcliff O'Malley

Britain is 'Shooting itself in the foot' by not raising tourist tax, Battersea power plant chief executive says guests wreaked havoc in London. and made it less competitive with rival European cities.

Mr Murphy said: “The UK cannot rest complacent on its international appeal in this increasingly competitive world and we risk shooting ourselves in the foot by not acting. .

The property manager was the latest high-profile businessman to call on Rishi Sunak to abandon the policy that was put in place when he was chancellor.

Harrods chief Michael Ward said last month that the retailer had been forced to replace luxury handbags with cheaper items in airport stores due to tourist tax. Executives from Burberry, Mulberry and Harvey Nichols also complained about the impact of this policy on sales.

Tourism is lagging behind

The Grade II-listed Battersea power plant was reopened last October after Malaysian investors spent billions to redevelop the area into apartments and a new shopping destination. Retailers with stores include Apple, Chanel and luxury watch brand Breitling.

Mr Murphy, who runs Battersea power development company, said the resumption of duty-free shopping for tourists would encourage more people to visit the UK and would «benefit not only the retail industry, but the wealth of businesses that rely on the tourist trade.»

EU countries are still duty-free, while US and Middle Eastern tourist spending has risen in France and Italy, and the UK is barely reaching pre-pandemic levels.

The UK is expected to miss. According to tax-free shopping firm Global Blue, more than £3bn in tourism spending this year due to the tourist tax.

A Treasury spokesman said: foreign tourists buying goods in the UK to claim VAT refunds when they return home.

“This scheme could cost UK taxpayers around £2bn a year at a time when we have already had to make difficult decisions to reduce debt , and less than one in ten visitors from non-EU countries used the previous scheme, showing that it is not particularly attractive for tourists.”