Luxury industry fears Brexit tax change will keep London tourists away

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England’s luxury stores will have more than Christmas sales to worry about when they reopen next week. Many fear a planned tax change related to Brexit could hurt business even more than Covid-19 lockdowns.

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Retailers are calling on UK Finance Minister Rishi Sunak to reverse a decision to abolish a perk for shoppers from China, the Middle East, the US and other areas outside the European Union. The system lets them reclaim the 20 percent value-added tax on purchases in the UK.

Sunak’s plan, which is expected to go into law as soon as Thursday and would take effect when the Brexit transition ends on December 31, would make Britain an outlier in Europe, according to the Association of International Retail.

Rather than boosting government coffers as intended, businesses say, the move will encourage tourists to shop in Paris or Milan rather than coming to London for Burberry coats or Mulberry handbags -- a change that would put jobs at risk and also hurt hotels, restaurants, theaters and other tourist sites already suffering from the pandemic.

Ewan Venters, chief executive officer of the London luxury food emporium Fortnum & Mason, calls the plan “suicidal.”

“Just as retail needs everything in its armory to help its recovery, it would appear this policy is completely out of sync with that,” he said in an interview with Bloomberg Television.

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