Burberry attacks move to scrap tax-free shopping on eve of Brexit



a sign on the side of a building: Photograph: Yui Mok/PA


© Provided by The Guardian
Photograph: Yui Mok/PA

Burberry has warned that the government’s plan to scrap tax-free shopping will rob the British luxury brand of its “home market advantage” on the eve of Brexit, as wealthy international tourists opt to holiday in mainland Europe instead.

Julie Brown, the chief operating officer of Burberry, said foreign tourists, who are traditionally behind more than half of its UK sales, could “turn to buying in Europe”.

“This represents a challenge as we could lose our home market advantage competing against brands in Paris and Milan,” she said.

The Treasury’s decision to end tax-free shopping on 31 December has caused a storm in retail and tourism circles. The Treasury wants to use the end of the Brexit transition period to bring personal duty and tax systems in line with international norms.

Millions of wealthy tourists from China and the Middle East come to Britain each year, spending nearly £18bn on shopping trips, hotel stays and days out. The current retail scheme hands these non-EU visitors a major perk as they can reclaim the 20% VAT paid on purchases such as clothes, handbags and jewellery.



a sign on the side of a building: The Centre for Economics Research believes the end of tax-free shopping will cause a 7% drop in non-EU visitors, around 1.2 million people, and cost up to 41,000 jobs.


© Photograph: Yui Mok/PA
The Centre for Economics Research believes the end of tax-free shopping will cause a 7% drop in non-EU visitors, around 1.2 million people, and cost up to 41,000 jobs.

The scheme effectively makes goods a fifth cheaper, a discount that is particularly significant to luxury brands and high-end department store such as Selfridges and Harrods who sell high-priced designer clothing and accessories. Burberry’s popular Lola bag, for example, starts at £790 with eligible travellers able to recoup nearly £160.



a woman walking down a sidewalk in front of a building: People wearing protective masks pass a Burberry store at Covent Garden, London, during coronavirus lockdown. Photograph: John Sibley/Reuters


© Provided by The Guardian
People wearing protective masks pass a Burberry store at Covent Garden, London, during coronavirus lockdown. Photograph: John Sibley/Reuters

A recent report by the Centre for Economics Research suggested that withdrawing the scheme would result in a 7% drop in the number of non-EU visitors, the equivalent of 1.2 million people, and up to 41,000 job losses. Heathrow airport is seeking to overturn the decision through a judicial review.

Brown’s comments came as Burberry updated investors on a difficult six months when disruption caused by the pandemic sent sales down 31% to £878m. Pre-tax profits fell 62% to £73m for the six months to 26 September. The coronavirus pandemic, coupled with the tax-free shopping issue and Brexit, meant the business faced “three layers of challenge on top of each other”, she said.

Over the last three years the British brand has been revamped by its Italian chief executive Marco Gobbetti who wants Burberry to become a super-luxe brand, in the same league as Gucci and Dior, which both have higher prices and profit margins.

In 2018, the British label previously best known for its trenchcoats and signature check replaced its longstanding creative supremo, Christopher Bailey, with Riccardo Tisci.

The collections created by the former Givenchy designer, which have included bomber jackets and bumbags emblazoned with a new logo comprised of interlocking Ts

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Brexit news: Michel Barnier posts shopping list of Brexit demands as talks restart TODAY | Politics | News

The Brussels diplomat claimed there are “three key” points to overcome in order to finally make progress after weeks of deadlock. He insisted the divides over access to Britain’s coastal waters, the so-called “level-playing field” and an agreement to police any future deal would need to be resolved.

Writing on social media, Mr Barnier said: “Happy to be back in London today, redoubling our efforts to reach an agreement on the future EU-UK partnership.”

He claimed any agreement must “respect EU autonomy and UK sovereignty with effective governance and enforcement mechanisms between international partners”.

In a demand that could rock the Brexit talks, Mr Barnier insisted future common standards should be made to “evolve over time”.

Downing Street has been adamant it would not enter into an agreement with Brussels that ties Britain to the bloc’s standards over time.

And finally, Mr Barnier said any future relationship pact must provide “stable and reciprocal access to markets and fishing opportunities in the interest of both parties”.

The EU’s chief negotiator will hold talks with UK counterpart in London today in the hope of bridging the gaps between the two sides.

Ahead of the talks, Mr Barnier told colleagues he feels the “weight of responsibility on my shoulders” to find a quality agreement.

He believes a deal on trade and security is needed more than ever to help counter the growing terrorism threat and economic fallout caused by the coronavirus pandemic.  

Boris Johnson over the weekend declared a Brexit deal with the European Union is “there to be done”.

The Prime Minister, who has received a series of briefings from his chief negotiator, said: “I think it’s there to be done, the broad outlines are pretty clear.

“We just need to get them to do it if we can.”

Mr Johnson promised to “redouble efforts to reach a deal” after a weekend call with European Commission President Ursula von der Leyen.

MUST READ: Brexit latest: What is happening with Brexit now?

Brexit trade talks will likely be overshadowed by a House of Laws vote on the Government’s Internal Market Bill.

Peers are expected to inflict a heavy defeat on No10, demanding controversial powers to rip up last year’s Withdrawal Agreement are stripped from the legislation.

Mr Barnier has accused Downing Street of using its Brexit Bill to pressure the EU into concessions.

The Brussels diplomat told allies he was suspicious whether Britain was deliberately stalling its preparations for the end of the transition period in a bid force the bloc to reopen the divorce deal.

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