UK (Parliament Politics Magazine) – Burberry CEO Joshua Schulman urges Chancellor Rachel Reeves to reinstate tax-free shopping for tourists to attract shoppers and strengthen UK luxury retail.
As reported by The Guardian, Burberry executives are calling on Rachel Reeves to restore a VAT refund scheme for overseas shoppers to boost spending and drive growth.
What did Burberry bosses say about reinstating VAT refunds for tourists?
The British luxury brand has urged the chancellor to adopt “progressive policies” to encourage tourism spending, highlighting that the scrapped VAT refund ended five years ago.
The VAT refund scheme for tourists was ended in late 2020, briefly reinstated, but scrapped again weeks later by former Prime Minister Rishi Sunak.
Burberry warned that Britain has been losing business, as luxury shoppers from the US, the Middle East, and Asia now choose Paris and Milan instead of London for high-end goods.
Executives suggested that Rachel Reeves has a chance to bring overseas buyers back to the UK in the upcoming budget.
Burberry’s chief executive, Joshua Schulman, said in a statement,
“We would like to see progressive policies that reinvigorate international visitor spending, that support jobs and stimulate growth across the whole visitor economy.”
He stated that it would involve
“changing the VAT refund scheme, putting us on par with other European countries. We know that our tourist business here in London has gone down ever since that refund was taken away.”
Mr Schulman added Burberry had
“begun to see customers return to the brand they love, resulting in comparable store sales growth for the first time in two years. While it is still early days and there is more to do, we now have proof points that Burberry Forward is the right strategic path to restore brand relevance and value creation.”
Burberry said UK sales make up less than 10% of its total revenue, but could grow significantly if the government restores the VAT refund.
Its chief financial officer, Kate Ferry, stated,
“Obviously at the moment [UK sales are] just 10% but it could clearly grow to be a lot more than that if we had more tourism here.”
She continued,
“We had a large transformation programme over the summer, [and] yes, we are facing some reasonably large, exceptional items relating to those this year. But as we move into next year, I can certainly see a world where we’re delivering strong profit and good free cashflow.”
The luxury brand welcomed signs of recovery, with comparable store sales up 2% and losses nearly halved over the six months to September.
How is Burberry planning to cut 1,700 jobs to restore profits?
Burberry announced restructuring plans in May that could cut around 1,700 positions worldwide by 2027, including the entire night shift at its West Yorkshire factory, to reduce costs and boost profits.
The luxury brand posted an adjusted operating profit of £19m for the six months to September, reversing last year’s £41m loss. It reported a £48m loss after a £37m restructuring charge linked to job cuts, down from an £80m loss last year.
What is tax-free shopping?
Tax-free shopping allows international tourists to purchase goods without paying UK value-added tax. This applies only if the products are delivered directly to an address outside the UK or the EU.
Rachel Reeves is not expected to scrap VAT but may adjust VAT thresholds as part of broader fiscal measures in the November 2025 budget.