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4th September 2023

Sir Rocco Forte: Rishi Sunak needs to think again on the Tourist Tax

Sir Rocco Forte


THE Conservative Party likes to claim to be the party of business – and in the past, when they have demonstrated this, I have supported them as a donor.

But under Rishi Sunak, the party seems to have completely lost touch with what business leaders and entrepreneurs want to see.

For a start, the tax burden is far too high – and there is no better demonstration of this than the decision in 2021 to scrap the traditional tax rebate scheme for foreign tourists, which had been in place for 60 years.

Some of us warned at the time that taking this step when every single country remaining in the EU continues to offer tax-free shopping was bound to end in tears, but we were ignored.

It is now sadly apparent that the decision taken by Mr Sunak when he was Chancellor has turned into the most appalling economic own goal.

My hotel group has properties across Europe and tourists are simply not returning in the same numbers to the UK as they are elsewhere. Milan, Paris and Berlin can’t believe their luck.

When challenged on the issue, Mr Sunak likes to claim that the £2bn a year tax break became unaffordable and only benefited a few luxury outlets in London’s West End.

This is completely wrong – and hard to understand from a man who grew up seeing his parents build a small pharmaceutical business so should understand how business works. It is completely short-sighted to look narrowly at the cost of the VAT rebate.

Instead, you should consider the broader economic benefits that tourists bring to our whole economy – their spending in hotels like mine, restaurants, bars, tourist attractions, museums, galleries, theatres, on public transport and so on.

Analysis we commissioned from the Centre for Economics and Business Research concluded that the tourist tax is costing the UK £10.7 billion in lost GDP and deterring two million extra foreign visitors a year who would otherwise be here spending money throughout the economy. For every £1 refunded in sales tax to foreign tourists, the exchequer would gain £1.56 in other taxes thanks to the dynamic economic effects of tourist expenditure.

I have organised an open letter to the Chancellor calling for what we have branded ‘the tourist tax’ to be scrapped. So far, 350 business leaders have signed – ranging from Harvey Nichols to Marks & Spencer to Primark. Other signatories include British Airways, Burberry, Heathrow, Gatwick, Glasgow, Edinburgh and Aberdeen Airports, Jigsaw, Victoria Beckham, the Royal Opera House, British Fashion Council, Fenwick, Charlotte Tilbury, UKinbound, Tate, The Really Useful Group, Shakespeare’s Globe, Southbank Centre and Bicester Village. This goes way beyond London and is affecting every high street.

The chorus of criticism has become deafening – and Mr Sunak cannot responsibly go on ignoring it. If he does, I and other business leaders will conclude that while he occasionally appears interested in the concerns of his hedge fund friends, his understanding of entrepreneurship and how the economy works is sadly lacking.

If you are a business leader wanting to sign Sir Rocco’s open letter to the Chancellor, please contact

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