Cadogan Estates CEO Hugh Seaborn has voiced concerns about the UK’s tourist tax, claiming it diverts affluent visitors away from the UK, impacting various sectors.
- The removal of tax-free shopping for international visitors is particularly affecting luxury brands on Sloane Street.
- Affluent tourists are choosing Paris, Milan, and Madrid over London, leading to a broader economic impact.
- Seaborn emphasises that the tourist tax affects not only retail but also hospitality and cultural attractions.
- Persistent advocacy exists for the reinstatement of the tax-free shopping scheme, highlighting the economic arguments in its favour.
Cadogan Estates CEO Hugh Seaborn, overseeing 90 acres of prime land in Chelsea, including Sloane Street and King’s Road, has described the UK’s tourist tax as an ‘absolute own goal for this country.’ The abolition of the tax-free shopping scheme, which allowed international visitors to reclaim 20% VAT on purchases, has significantly impacted luxury brands on Sloane Street.
Seaborn highlighted that London is losing international visitors to Paris, Milan, and Madrid due to the tourist tax. Despite the resilience and strong recovery from the pandemic, luxury brands that heavily rely on international visitors are feeling the adverse effects. ‘We’ve definitely been impacted by the tourist tax,’ he remarked, noting its particular toll on uber-luxury brands.
Rishi Sunak, as the Chancellor in 2021, scrapped the tax-free shopping scheme, a move estimated by the Office for Budget Responsibility to save the exchequer £2 billion. Despite this financial saving, retail and hospitality groups have persistently called for the scheme’s reinstatement, arguing that its removal diminishes the UK’s attractiveness to wealthy tourists.
According to Seaborn, the impact of the tax extends beyond just retail; it affects hotels, restaurants, and cultural attractions. He explained, ‘It’s not just about shopping; [these visitors] stay in the hotels, go to the restaurants and the theatres and the museums.’ The economic benefits of international tourism spread to regions outside London, including areas known for their luxury craftsmanship, such as Northamptonshire and Scotland.
Luxury brands within Cadogan Estates, including high-end names such as Audemars Piguet, Louis Vuitton, and Tiffany, are notably impacted. The estate’s five-star hotels and fine dining establishments are also feeling the strain. Despite ongoing efforts to advocate for the scheme’s return, Seaborn acknowledges the government’s current challenges, stating, ‘There is some very strong advocacy going on with the government,’ but the political landscape remains complex.
The ongoing debate highlights the significant economic implications of the UK’s tourist tax on various sectors, with continued calls for policy reconsideration.
