Tourist tax driving Americans from UK

Published on: April 12, 2025

By ANNE ASHWORTH AND EMILY HAWKINS

Updated: 21:51 BST, 12 April 2025

Luxury goods retailers are urging the Government to scrap VAT on tourists’ purchases – or risk rich Americans flocking to the Continent to escape tariffs on high-end goods.

Such shoppers may shun London in favour of Paris and Milan unless there is a rethink on the so-called ‘tourist tax’, retailers warn.

Brian Duffy is head of Watches Of Switzerland, which, despite its name, is an £849 million UK-listed retailer selling brands such as Omega, advertised by Cindy Crawford and daughter Kaia Gerber.

‘Even before tariffs, luxury goods prices were already higher in the US than in Europe, and Americans love a bargain,’ he said. But he added his firm wouldn’t get a ‘fair share’ of their purchases unless the Treasury re-examined the tax.

Timeless: Cindy Crawford and daughter Kaia Gerber are Omega ambassadors

Watches Of Switzerland recently opened one of the largest Rolex boutiques in Europe – on London’s Bond Street – but last week said it would close many UK showrooms.

The CEBR consultancy said the Treasury had lost £11 billion a year in revenue since tax-free shopping for tourists was abolished in 2021.

Helen Brocklebank of luxury goods trade body Walpole said: ‘For every £1 spent by high-value visitors, £8 flows into the economy.’

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Tourist tax driving Americans from UK

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Tourist tax driving Americans from UK