The chairman of luxury fashion brand Burberry has challenged UK Prime Minister Rishi Sunak over the impact of a post-Brexit value added tax change, describing it as a “spectacular own goal”.
Speaking at the Business Connect conference in London, Gerry Murphy criticised the decision to scrap the VAT refund for tourists, arguing that it has made Britain the “least attractive” shopping destination in Europe.
He urged Chancellor of the Exchequer Jeremy Hunt to consider reversing the decision.
Mr Sunak, who had convened the conference with about 200 high-profile chief executives to address business concerns amid the challenges of Brexit and coronavirus, defended the move but pledged to review the data on its effects.
The British Prime Minister also reiterated his government's commitment to driving up skills in the country and promoting growth while developing a migration system to attract talent.
During the conference, both Mr Sunak and Mr Hunt reassured the business community that the government was providing stability, despite what the Chancellor called a “bumpy period” last year.
However, Labour's shadow chief secretary to the Treasury, Pat McFadden, accused the Tories of economic mismanagement, pointing to the UK's inflation growth rate as evidence of “Tory economic failure”.
The VAT change was not the only topic discussed at the conference. Those attending also heard about changes to the process for moving excise duty paid goods between EU member states, which will take effect in February 2023.
In addition, Mr Sunak confirmed in the latest budget that corporation tax rates would increase from April 2023 for companies with profits of more than £250,000, although small companies with profits up to £50,000 will continue to pay corporation tax at 19 per cent.
Companies with profits between £50,000 and £250,000 will pay tax at the main rate reduced by a marginal relief, providing a gradual increase in the effective corporation tax rate.
