Scrapping of VAT-free shopping in the UK was ‘short-sighted’, warns Watches of Switzerland boss
The scrapping of VAT-free shopping in the UK was ‘short-sighted’ and will add to the strain on the public purse, the boss of Watches of Switzerland has warned.
Brian Duffy, who took over the luxury watch firm in 2014, said there is ‘no question’ shoppers are being driven elsewhere in Europe to enjoy the tax break.
VAT-free shopping, which allows overseas visitors to claim back 20 per cent on their purchases in the UK, was scrapped by then-Chancellor Rishi Sunak when the UK left the EU in 2021.
Ticked off: Watches of Switzerland boss Brian Duffy said there is ‘no question’ shoppers are being driven elsewhere in Europe to enjoy VAT-free shopping
‘We are just about the only ones in the Western world who are not providing VAT-free shopping,’ he said.
Former Chancellor Kwasi Kwarteng tried to reintroduce the break in his disastrous September mini-Budget, but the move was reversed by his replacement Jeremy Hunt.
At the time the Government claimed scrapping the tax break would earn the Exchequer £2billion per year.
‘It’s not just the VAT,’ Duffy said. ‘Not having VAT-free shopping for tourists is a net loser overall to the Exchequer.
Sales at the retailer jumped 23 per cent in the six months to October 30 to £765million.
Profit rose to £88million, from £67million in the same period last year. Shares gained 0.2 per cent, or 2p, to 917p.