Mulberry boss urges Government to bring back VAT-free shopping for tourists

Mulberry CEO Andrea Baldo is urging the UK Government to bring back VAT-free shopping for tourists as it looks to trigger growth in the economy and boost investment.

Baldo told The Telegraph that the "unfair" tax burden is holding back Britain at a time when the luxury sector is being impacted by a fall in spending from international shoppers, many of whom are heading to the likes of Paris and Rome to do their VAT-free shopping instead.

He said that the Government’s decision to end VAT-free shopping in 2021 is “really affecting our business”.

Looking at London before the pandemic, compared to today, Mulberry’s boss pointed out that the luxury British brand has probably lost around a fifth of the traffic from international visitors. However, Mulberry’s stores in Dublin and Amsterdam have “almost doubled their business from international travellers”.

The CEO estimated that Mulberry had lost almost £10 million of UK sales between the pandemic and today because of the loss of tax-free shopping.

It comes just as the UK prepares for Chancellor Rachel Reeves’ upcoming Budget announcement on 26 November.

Reeves is under pressure to increase Britain’s GDP after the Office for Budget Responsibility warned last week that low productivity meant the economy could no longer grow as quickly as in the past.

However, the Chancellor has already refused to rule out further tax rises as she says she will make the “necessary choices”, despite Labour’s pledge not to hike income tax, VAT or National Insurance in its general election manifesto.

Reeves has once again pinned the need for forthcoming tax rises on the failings of previous governments.