Mulberry boss ‘could shut flagship store’ in London if VAT-free shopping for tourists is not reinstated

• Fashion brand Mulberry might be forced to close flagship store on Bond Street 
• Abolition of tax-free shopping blamed by Mulberry boss, Thierry Andretta 
• UK Treasury said reinstating VAT-free shopping comes at ‘too high’ a cost 

The boss of Mulberry warned the abolition of tax-free shopping for overseas visitors could force the brand to close its flagship store on London’s Bond street.

In a scathing attack on the Government, Thierry Andretta said wealthy American and Middle Eastern tourists are snubbing the UK to shop in Paris, Milan and elsewhere in Europe.

Among a string of tax rises in the Autumn Statement, Chancellor Jeremy Hunt confirmed VAT-free shopping, which allows overseas visitors to claim back 20 per cent on purchases, would be scrapped. 

It was first axed by then-chancellor Rishi Sunak when the UK left the European Union. 

Thierry Andretta said wealthy American and Middle Eastern tourists are snubbing the UK to shop in Paris, Milan and elsewhere in Europe

Mr Andretta, 65, said: ‘It is putting us in a difficult situation. We are now missing up to 50 per cent of our business on Bond Street

Kwasi Kwarteng tried to reintroduce it in his notorious ‘mini-Budget’, but Mr Hunt reversed the plan claiming it would save the Treasury £2billion each year.

But critics said it would be a ‘hammer blow’ to tourism and high streets, slowing the return of international tourists and costing the Government more in lost tax income elsewhere. 

Every country in Europe charges a minimum 15 per cent rate of VAT but offers a refund for overseas visitors taking purchases home.

A report by forecaster Oxford Economics revealed VAT-free shopping would attract 1.6million additional tourists a year, earning the Treasury £350million.

Mr Andretta, 65, said: ‘It is putting us in a difficult situation. We are now missing up to 50 per cent of our business on Bond Street. 

‘People from the US, with a strong dollar, and people from the Middle East who used to buy in the UK, are now buying in other European capitals. 

‘We urge the Government to reconsider its position on tax-free shopping to help the UK compete with its European neighbours.’

But a Treasury spokesman said reintroducing VAT-free shopping would come at ‘too high a cost’.

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