Burberry’s Irish chairman challenges Sunak over ‘spectacular own goal’ UK tourist tax

Burberry’s Irish chairman Gerry Murphy said the UK had scored a “spectacular own goal” in removing a tax break for tourists, triggering an awkward exchange with British prime minister Rishi Sunak.

The UK government’s withdrawal of VAT rebates on shopping by overseas visitors after Brexit was a “bad decision,” Mr Murphy said in a question to Sunak at the premier’s Business Connect event in London Monday. The “perverse” move had “made the UK the least attractive shopping destination in Europe,” he said.

The criticism at a conference aimed at resetting the governing Conservative Party’s relations with business after years of acrimony since Brexit is uncomfortable for Sunak. That’s because removal of the VAT rebate at the end of 2020 was a policy he implemented while chancellor.

Mr Sunak replied that he would listen to Murphy’s concerns, while declining to comment on possible tax changes out of deference to Chancellor of the Exchequer Jeremy Hunt.

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Mr Murphy was Greencore chief executive in the early 90s and has held a succession of corporate roles since, including more than a decade with private equity giant Blackstone. He became Burberry chairman in 2018.

The rebate had previously allowed visitors to reclaim the sales tax on high-street purchases made while in the UK. Its removal – branded a tax on tourists by business leaders in a co-ordinated letter to Hunt this week – had hit luxury brands in the UK, as well as hotels, non-luxury shopping and other industries, Mr Murphy said.

In response, Mr Sunak conceded “we don’t get everything right” and told Mr Murphy: “We’re here to listen. We’ll take that away” and “happily see all the data.”

However, he stopped short of a commitment to reconsider the policy, insisting: “There were good reasons for it.”

The exchange typified the testy relationship between successive Tory governments and business since the UK vote to leave the European Union in 2016, highlighted by the use of an expletive by former premier Boris Johnson in response to business concerns about exiting the bloc.

Monday’s event was also a bid by the Conservatives to counter opposition Labour Party leader Keir Starmer’s efforts to woo business chiefs and City donors ahead of a general election campaign likely next year. Labour currently leads the Tories by around 16 points in opinion polls.

However, he stopped short of a commitment to reconsider the policy, insisting: “There were good reasons for it.” – Bloomberg