The boss of Harrods, Michael Ward, has criticized the UK government for disregarding the reinstatement of VAT-free shopping for tourists. Ward argues that the government is ignoring the potential benefits of this scheme, as luxury retailers are losing out on significant amounts of money due to tourists choosing to shop in other European destinations where they can claim back the VAT on their purchases.
Ward’s comments were made in response to Nigel Huddleston, the trade minister, who had requested businesses to provide more data on the impact of the removal of the VAT refund scheme. Ward believes that retailers have already provided sufficient information on this matter, referencing an independent report by Oxford Economics commissioned by the Association of International Retail. The report states that the scheme would bring an annual benefit of around £350 million, contradicting the Treasury’s estimate of a cost of £2 billion. Ward advises the government to review the report and reconsider tax-free shopping if its findings are deemed accurate by the Office for Budget Responsibility.
In a recent interview, Huddleston mentioned that Chancellor Jeremy Hunt would evaluate the current tax policy during the autumn statement, suggesting the possibility of revisiting the VAT refund scheme in the future.
Expressing his frustration with the government, Ward emphasizes the need for them to recognize the economic advantages of reintroducing tax-free shopping and take appropriate action. He believes that the current lack of the VAT refund scheme has led affluent tourists to prefer countries like France and Italy, where they can claim back the VAT on their purchases. This has resulted in substantial losses for high-end retailers in the UK. Reimposing the scheme would not only encourage tourists to shop in the UK but also stimulate the economy by generating additional revenue.
In conclusion, Harrods boss Michael Ward has called out the UK government for disregarding the reinstatement of tax-free shopping for tourists. He asserts that the government should actively pursue opportunities to boost the economy, and restoring tax-free shopping would be a step in the right direction. Ward’s comments highlight the frustration shared by many retailers who have already provided evidence supporting the economic benefits of the scheme. It remains to be seen whether the government will reconsider its position on this matter during the autumn statement.
Useful links:
1. Harrods Careers
2. Retail Gazette
