Tourist tax delight: Mulberry is closing its Bond Street store as the government ends VAT-free shopping for international visitors

It has long been a destination for fashionistas looking for the luxury bags loved by the Princess of Wales and A-list stars.

But now the glossy Mulberry store in Bond Street is closing for good – a victim of the “tourist tax”, which prevents international visitors from claiming a 20 per cent VAT refund.

The moment it closes its doors for the last time today marks the end of the prestigious brand’s presence on the street where it first opened in 1995.

The latest setback for companies profiting from overseas customers comes after Chancellor Jeremy Hunt pushed through the levy.

The stimulus is still being offered in continental Europe and experts say people are now flocking to France and Spain.

A Mulberry spokesman said last night: “The lack of VAT-free shopping in the UK is particularly noticeable on Bond Street, which has always been a popular shopping destination for tourists. The decrease in visitors had an impact on attendance and sales.’

Mulberry has long been a destination for fashionistas looking for the luxury bags loved by the Princess of Wales and A-list stars

They added that high rents and business rates also helped to “make the business commercially unviable, leading us to take the difficult decision to close.”

Tourists visiting the UK were allowed to reclaim VAT on purchases until January 2021, when the tax break was scrapped by the then chancellor Rishi Sunak.

Kwasi Kwarteng tried to reintroduce the stimulus in his “mini-budget”, but Mr Hunt reversed the decision a month later.

The Treasury claims it will save £2bn a year – a figure disputed by some economists who believe it will actually flow into the coffers.

In December, both Harrods and Selfridges bosses backed calls for a tax overhaul.

And last month Julie Brown, chief financial officer of rival Burberry, said foreign tourist demand in London had recovered much more slowly than in Europe since the pandemic. The biggest increase in spending was seen among visitors from the Middle East, up 122 per cent in European stores, but just 14 per cent in the UK.

Harrods boss Michael Ward said: “There is very clear factual evidence that Paris has done disproportionately well as a result.”

Paris, Rome and Berlin can hardly believe their luck! Should Great Britain seize the opportunity of Brexit, the abolition of duty-free shopping for international tourists would be a spectacular own goal, writes SIR ROCCO FORTE

What a spectacular own goal for UK plc! Just as we need to seize the opportunities presented by Brexit to create a more dynamic economy that appeals to overseas visitors and investors, the Treasury has decided to end duty-free shopping for international tourists.

It came at the worst possible time after the pandemic ripped the heart out of Britain’s hospitality industry and high street.

Recognizing the damage, Liz Truss’s short-lived government announced it would no longer charge foreign customers VAT on their purchases. In a difficult time for the economy, the Treasury Department was here to help struggling companies weather the storm. So imagine my shock when Jeremy Hunt announced he was reversing the move, claiming it would save the government £2 billion a year.

Visit Britain’s figures show that shopping is one of the most cited reasons for visiting the UK. British companies earn £3.5 billion each year from duty-free sales to tourists. These visitors didn’t just splurge on business—they custom-built hotels like mine, restaurants, and theaters.

It came at the worst possible time after the pandemic ripped the heart out of Britain’s hospitality and high street industries

Experts tell us that it was worth at least £10 billion a year to the entire UK economy.

But now that we are suddenly charging 20 percent more than other countries for the same product, international visitors should do everything they can to encourage them to come here and not hesitate to go elsewhere.

Every country that remains in the EU now offers duty free shopping while we do not, which significantly hurts our economy.

Paris, Rome and Berlin can hardly believe their luck.

How depressing to hear that a major British brand like Mulberry is now closing the doors of one of its flagship stores.

According to Oxford Economics, the reintroduction of duty-free shopping will attract more than 1.6 million additional visitors to the UK each year by 2025. We cannot afford to refuse them.

As old-fashioned as the tax cuts may be under this government, the chancellor needs to rethink.