Business

Angela Rayner has thrown her weight behind calls from regional mayors for the introduction of a local ‘tourist tax’ on hotel stays — a move that risks deepening divisions within Labour’s top ranks and raising alarm among hospitality leaders.

The Deputy Prime Minister is reported to be at odds with Chancellor Rachel Reeves over the issue, supporting proposals to allow local authorities to impose visitor levies in a bid to raise additional funds for infrastructure and services.

Several Labour metro mayors — including London’s Sadiq Khan, Greater Manchester’s Andy Burnham and Liverpool City Region’s Steve Rotheram — have lobbied for the power to implement a small charge on overnight stays, similar to those already in place across European destinations such as Barcelona, Paris and Rome.

In contrast, the Treasury is understood to be resisting the move, amid fears it would pose a fresh blow to the UK’s already stretched hospitality sector. Reports suggest Reeves has ruled out including any such fiscal devolution in the current legislative programme.

Despite this, Rayner is said to have advocated for the inclusion of tourism tax powers in Labour’s new devolution bill, published earlier this month. The move comes at a time when the party is already under pressure for plans to increase employers’ National Insurance contributions — dubbed a “£25 billion jobs tax” by critics.

The prospect of a tourist tax has been met with strong resistance from hospitality leaders and Conservative figures. Kate Nicholls, chief executive of UK Hospitality, warned that England already ranks poorly in global tourism competitiveness, in part due to its higher VAT rate compared with continental rivals.

“A further levy would simply exacerbate the pressure on operators already facing a challenging trading environment,” she said.

Shadow Chancellor Mel Stride accused Labour of reverting to type. “Whether it’s Angela Rayner or Rachel Reeves, the instinct is always the same – more taxes. First a £25 billion jobs tax, now threats of a tourist tax that would hit hospitality hard.”

Despite the pushback, Labour mayors argue that a visitor levy would enable reinvestment in local infrastructure that supports the tourism economy.

Steve Rotheram, Mayor of the Liverpool City Region, said: “Our region attracts more than 60 million visitors annually and supports a £6.25 billion visitor economy. That’s something to be proud of – but it also comes with significant pressure on our public services.

“A small charge on overnight stays – the kind most people wouldn’t think twice about when travelling abroad – would allow us to reinvest directly into the things that make our area so special.”

While there is no national framework for a tourist tax in England, local authorities can already adopt a levy through the Accommodation Business Improvement District (ABID) model. However, adoption is limited and patchy, and mayors are calling for broader powers through national legislation.

A Government spokesman reaffirmed that “there are currently no plans to introduce a tourism tax in England,” but added that existing mechanisms — such as the mayoral council tax precept — are already being expanded to allow local leaders to invest in growth-driving initiatives.

With the UK’s tourism and hospitality sectors still recovering from the effects of the pandemic and labour shortages, the idea of a tourist tax is likely to remain contentious. For hotels, especially those in competitive urban markets like London, Manchester and Liverpool, any additional levy could deter price-sensitive domestic and international travellers.

At a time when political parties are looking for new ways to fund local services, the debate over a UK tourist tax looks set to intensify — with the hospitality sector caught in the crossfire.

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Angela Rayner backs mayoral calls for hotel ‘tourist tax’ despite hospitality sector concerns

HM Revenue and Customs (HMRC) collected a staggering £2.2 billion in inheritance tax (IHT) in the first three months of the current tax year, new data released this morning reveals—£100 million more than the same period last year.

The increase highlights a worrying trend: more families are being drawn into the IHT trap due to frozen thresholds, rising property prices, and soaring inflation. The government’s take from IHT has now been steadily climbing for two decades, adding to what experts call the highest overall tax burden in 70 years.

Nicholas Hyett, Investment Manager at Wealth Club, called IHT “a meal ticket for HMRC” and criticised the long-standing freeze on the nil-rate band, which has remained at £325,000 since 2009 and is set to stay fixed until at least 2030. The £175,000 residence nil-rate band, introduced in 2017 to protect the family home, also hasn’t budged since 2020.

“These freezes are a form of stealth tax,” Hyett said, “designed to quietly increase the government’s take without the political backlash of a headline-grabbing hike.”

As property values and inflation continue to rise, many families who would not consider themselves wealthy are now being caught by a tax once associated only with the very rich.

Hyett also pointed to the Chancellor’s recent U-turn on IHT rules for non-doms, citing the exodus of wealthy individuals from the UK, while other sectors—such as farmers and AIM investors—face continued uncertainty.

With inheritance tax taking centre stage ahead of the Autumn Budget, financial planners are encouraging families to review their estate strategies.

“In this environment, lifetime gifts are probably more attractive than ever,” said Hyett, especially regular gifts from surplus income, which are immediately IHT-free and popular for paying grandchildren’s school fees.

Alongside inheritance tax, Insurance Premium Tax (IPT) receipts also rose sharply, hitting £2.17 billion in Q1. Emily Jones, Client Consulting Director at Broadstone, said the surge was being fuelled by rising demand for private health insurance, as NHS delays push more people toward employer-backed or self-funded care.

“Employers are stepping up, but rising IPT costs risk pricing out smaller businesses,” said Jones. “If the government wants a healthier workforce and a more resilient NHS, a targeted IPT exemption for health insurance should be on the table.”

With a £20 billion fiscal black hole to fill and tax revenues climbing quietly through frozen thresholds and stealth levies, the Autumn Budget is shaping up to be one of the most politically sensitive in recent memory. Both IHT and IPT may stay untouched in headline terms—but beneath the surface, the Treasury’s quiet tax grip is tightening.

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Inheritance tax haul hits £2.2bn in just three months amid rising property prices and frozen thresholds

The British Business Bank has swung back into profit with a pre-tax gain of £144 million, marking a significant turnaround for the UK’s state-owned economic development institution after two consecutive years of losses.

The return to profitability comes as the bank’s investment portfolio increased by 19% to £4.7 billion, driven by stronger performance across its equity and debt holdings. In the previous financial year to March 2024, the bank had recorded a £131 million loss.

Set up in 2014 to support small and medium-sized enterprises (SMEs) and improve access to finance, the bank now finds itself at the heart of the government’s latest industrial strategy. In June, ministers committed £6.6 billion of new capital, increasing the bank’s financial capacity to £25.6 billion as it prepares for a wider mandate to stimulate UK growth and productivity.

Headquartered in Sheffield, the British Business Bank has increasingly become a key lever in the government’s push to help UK firms scale domestically rather than overseas, particularly in light of the increasing allure of US capital markets.

Over the past year, the bank supported £6.8 billion in finance to smaller UK businesses, including:
• £1.2 billion directly deployed by the bank
• £2.6 billion in lending underpinned by guarantees
• £3 billion in “crowded in” private sector capital

This financing reached 24,000 first-time recipient businesses and an additional 4,000 repeat beneficiaries, highlighting its growing influence on the UK’s entrepreneurial ecosystem.

Chief executive Louis Taylor, the former head of UK Export Finance, said the bank’s efforts are expected to generate 38,000 new jobs and £8 billion in gross value added over the lifespan of the financing delivered.

“Having an economic development bank with permanent capital and a consistent risk appetite is a powerful and positive development for the UK,” said Taylor, who received total remuneration of £460,800 last year.

As part of its expanded remit, the bank will lead the British Growth Fund, a new investment vehicle aiming to unlock institutional capital—including from UK pension funds—to back domestic venture capital.

It marks a significant shift in strategy, with the bank managing capital on behalf of pension schemes for the first time. Early interest has come from major players such as Aegon UK, NatWest’s Cushon, and London CIV, a pool of local government pension schemes.

This initiative aligns with growing political pressure to unlock UK pension wealth to boost homegrown innovation, and help high-growth companies remain rooted in Britain.

While broader financial markets have faced turbulence from President Trump’s escalating tariffs, the British Business Bank said it expects no direct impact on its portfolio due to its strong domestic focus and limited exposure to the most affected sectors.

The bank’s long-term role now appears firmly embedded in the government’s economic growth agenda, with institutional credibility bolstered by its return to profit and a growing stable of private sector partnerships.

Taylor added: “We’ve undertaken a significant reshaping of our organisation to prepare for this expanded mandate and our long-term ambitions. The momentum is now with us to deliver impact at scale.”

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British Business Bank returns to profit with £144m gain and expanded investment role

Remortgaging means taking out a new mortgage to replace your current one. The most common reason people do this is to save money, especially if their current deal has ended and they’re now paying their lender’s often pricey Standard Variable Rate (SVR).

But saving money isn’t the only reason to remortgage, there are plenty of others that might be worth considering.

It’s also important to know that switching lenders isn’t your only option. Sometimes, your existing lender can offer you a new deal, called a product transfer, which might be simpler and quicker.

Why Remortgage?

Your mortgage is probably the biggest financial commitment you’ll ever make. So it makes sense to keep it working as hard for you as possible. A smarter mortgage can mean hundreds or even thousands saved each year.

If you’re used to shopping around for the best deals on everything from phones to holidays, it’s time to apply those same skills to your mortgage.

But remortgaging isn’t a one-size-fits-all solution. There are good reasons to remortgage, and times when it might not be right for you.

When Should You Consider Remortgaging?

Your current deal is coming to an end

Most mortgage deals last between two and five years. When yours finishes, your lender will usually move you to their Standard Variable Rate. This rate is typically higher than your previous deal and the best current offers. SVRs can be anywhere between 6.5% and 7.5%, which could mean a much bigger monthly payment.

To avoid this, it’s best to start exploring new deals around six months before your current mortgage deal ends.

You want a better rate

If you’re still in the middle of a deal but rates have dropped, it might be worth switching. However, early repayment charges (ERCs) can apply if you leave a deal early,  these can be quite substantial, sometimes 2-5% of the outstanding balance.

Before you switch, it’s important to do the maths. Sometimes paying an ERC and moving to a better rate can still save you money overall.

Your property value has increased

If your home’s value has gone up significantly, your loan-to-value ratio might have dropped, making you eligible for better interest rates. This could mean cheaper monthly payments.

You’re worried about rates rising

If you’re on a variable mortgage, rises in the Bank of England base rate could increase your monthly payments. Fixing your rate now might offer peace of mind.

You want to pay off your mortgage faster

Most lenders limit how much you can overpay each year without penalty — usually around 10%. Remortgaging could allow you to make larger overpayments without fees, helping you pay off your mortgage sooner.

You need to borrow more

If you want to borrow additional funds for home improvements or to clear debts, remortgaging with a new lender might offer better rates than other borrowing options. Just be ready to provide evidence of how you plan to use the money.

You want more flexibility

Maybe you want the option to take payment holidays or link savings accounts to your mortgage. Flexible mortgages can offer this, but often at a slightly higher interest rate.

When Might Remortgaging Not Be the Best Idea?

Your mortgage balance is small

If you owe less than around £50,000, fees might outweigh the savings from switching deals. In these cases, it may be better to stick with your current deal or look for a no-fee mortgage.

You face high early repayment charges

If the ERC is large, remortgaging could cost you more than it saves. But you might be able to do a product transfer with your current lender for a lower fee.

Your financial situation has changed

If you’ve changed jobs, gone self-employed, or your income has dropped, lenders might be stricter. This can make remortgaging more difficult.

Your property value has dropped

If your home is worth less than when you bought it, you might be in negative equity, making it harder to find a better mortgage deal.

You have little equity left

Borrowing more than 90% of your property’s value can limit your options for better rates.

You’ve had credit issues

Lenders want to see a good credit history. Even a missed payment could affect your chances of remortgaging.

You’re already on a great deal

If you’re happy with your current rate and deal, there’s no rush to switch. But keep an eye on the market for when your deal ends.

Speak to Mortgage Matters

Remortgaging can be a great way to save money or get a deal better suited to your needs, but it’s not for everyone. The key is knowing when to act, understanding the costs involved, and seeking remortgaging advice if you’re unsure.

If your mortgage deal is coming to an end or you want to explore your options, speak to a trusted mortgage advisor. They can help you weigh up the pros and cons, find the right deal for your circumstances, and guide you through the process smoothly.

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What Is Remortgaging and Why Does It Matter?

The number of Bitcoin millionaires has jumped by more than 15,000 in the first six months of Donald Trump’s second term as President, with new research linking the rise directly to favourable policy shifts and growing market confidence.

According to data from Finbold Research, 15,841 new Bitcoin wallet addresses reached millionaire status between 20 January and 20 July 2025, bringing the total to 192,205—up 9 per cent in just half a year. That equates to an average of 88 new Bitcoin millionaires created every day.

The sharpest increase was recorded in the highest value tier: wallets holding over $10 million in BTC surged by more than 16 per cent, suggesting that institutional investors and long-term holders are ramping up their positions.

The timing of the surge aligns closely with Trump’s re-election and his administration’s active pivot towards supporting the cryptocurrency sector. On November 6, 2024—the day after his victory—there were 132,842 Bitcoin millionaire addresses. Less than nine months later, that figure has grown by nearly 60,000.

The trend gained further momentum earlier this month when Trump signed the GENIUS Act into law. The bill, hailed as a landmark piece of crypto legislation, delivers long-awaited regulatory clarity around taxation, stablecoins, and institutional custody—three areas long seen as obstacles to mainstream adoption.

Markets responded quickly. The total cryptocurrency market cap soared past $4 trillion, a new all-time high, in the days following the bill’s passage through the House of Representatives and its signing at a White House ceremony on 18 July.

The Trump administration has made clear its ambition to make the United States the world’s leading hub for digital assets. Supporters argue that clearer rules and friendlier rhetoric from the White House are finally creating the conditions for meaningful institutional involvement—and wealth generation.

“With regulatory certainty and a bullish market, we’re entering a new phase of adoption,” said a spokesperson from Finbold. “The rise in Bitcoin millionaire addresses isn’t just a vanity metric—it’s a sign of renewed investor confidence and structural maturity.”

The combination of surging wallet wealth, landmark legislation, and the President’s public support for Bitcoin points to a potentially longer-term shift in both sentiment and strategy across the digital asset ecosystem.

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Trump’s first six months in office spark surge in Bitcoin millionaires, Finbold research reveals

Defence industry leaders say they are “confident” that hundreds of new jobs are on the way, as the UK government increases its military spending and prepares to finalise major procurement contracts.

More than 44,000 people across the South West of England are already employed in the defence sector, with over 130 firms depending heavily on Ministry of Defence (MoD) contracts. But many are now poised for growth—provided the government follows through on its spending pledges.

Speaking at the Royal International Air Tattoo (RIAT) in Gloucestershire, the world’s largest military air show, executives from across the industry expressed cautious optimism about the pipeline of future work.

Emma Baker, policy lead at trade body ADS, said: “We are anticipating a lot more work. It’s clear from government that a lot needs to be done to increase industrial capacity—not just in the UK, but across Europe, where defence budgets are also rising.”

One of the biggest deals currently on the table is a £1 billion order for more than 20 helicopters from Leonardo Helicopters’ Somerset factory in Yeovil, where over 3,000 people work. Though the company remains the sole bidder, the final decision is tied up in the government’s ongoing defence review.

According to Leonardo, the deal would create or safeguard 3,000 jobs across the country. In the meantime, the firm is continuing to invest in the future, recruiting apprentices and digital engineers to help meet future demand.

Among them is 20-year-old AJ McKenzie, a Yeovil native who joined the apprenticeship scheme a year ago and now works on the gearboxes used by the Royal Navy and RAF. “I absolutely love it,” he said. “Taking things apart and putting them back together—it’s so satisfying.”

Long-serving employee Chrissy Smith, who has spent 36 years with the company, now works on the ‘Digital Twin’ simulator, helping train pilots in a safe, virtual environment. “Every day is different,” she said. “I’m proud to be part of something that protects and secures the nation.”

While the Yeovil helicopter factory is the most visible face of the industry, dozens of smaller firms are equally reliant on MoD procurement. One of them is Broadway Group, a precision engineering firm tucked away on a trading estate in East Bristol.

Chief executive Seb Greene said defence contracts kept the business afloat during the pandemic. “Commercial orders just fell off a cliff. Everyone stopped flying. But defence work carried on, crucially,” he said.

Broadway has grown from 80 to 180 staff in recent years, thanks to military orders. It now hires four apprentices and one graduate annually and is expanding its digital and commercial teams.

Nanditha Gampala, who joined Broadway after completing a master’s degree in business, is keen to promote the variety of roles available in the aerospace sector. “Aerospace has something for people with different backgrounds and qualifications,” she said. “So don’t pigeonhole yourself—there really is something for everyone here.”

Despite the optimism, companies remain in a holding pattern as they await the MoD’s next round of orders. Greene is hopeful but realistic. “These things do take time,” he said. “But we’re confident the contracts will come. And when they do, we’ll invest in more technology—and crucially, more people.”

As defence spending rises and international tensions remain high, firms supplying the UK armed forces are preparing for a new era of growth. For many, the only thing missing is clarity from Whitehall.

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Defence sector confident of job surge as firms await MoD contracts

The Advertising Standards Authority (ASA) has upheld four separate complaints against an advert placed by Barry Hurley’s Luxury Lodge Estates Company.

The ruling has said that the promotion—published in the Sunday Times Magazine—was misleading and breached multiple sections of the UK advertising code.

The advert, which ran on 17 June 2024, invited readers to “own a luxury coastal lodge” and “invest from £295,000,” promising a return of “up to £83,454 over two years guaranteed return based on historical success.” It also touted “guaranteed returns” through a subletting plan, without outlining any associated risks, fees or conditions.

The ASA investigated four specific concerns raised by a former Seasons Holidays timeshare owner, all of which were upheld:

Misleading financial claims – The claim of “guaranteed” returns was found to be misleading, particularly as the ad itself stated they were “based on historical success,” which undermines the promise of a true guarantee.

Failure to highlight investment risks – The advert omitted any reference to the potential risks involved, a significant breach when promoting a high-value financial commitment.

Unclear explanation of income versus investment return – The ASA found that the ad failed to make clear that the advertised “return” related to subletting rental income, not capital growth or investment value.

Lack of transparency on fees and charges – It also did not disclose that additional fees and charges applied, which could significantly impact the actual return.

In its ruling, the ASA described the advert as “ambiguous,” “misleading,” and repeatedly stated that key elements “were not made sufficiently clear.” The phrase “breached the Code” appeared three times in its detailed multi-page assessment.

The ASA concluded that the advert should not appear again in its current form and issued a raft of correctional instructions to Luxury Lodge Estates.

A pattern of controversy

Luxury Lodge Estates Company Ltd was founded in 2015 and operates in the high-end holiday park sector. Its sole director, Barry Thomas Hurley (pictured), is also behind Seasons Holidays PLC—a timeshare firm previously accused in national media reports of forcibly removing long-term owners from properties such as Slaley Hall in Northumberland. These same lodges have since been remarketed as luxury properties through Luxury Lodge Estates.

Both companies have faced ongoing allegations regarding questionable contracts and sales methods, echoing historic criticisms of the timeshare industry.

Industry reaction

Greg Wilson, CEO of European Consumer Claims (ECC)—a leading organisation in consumer rights for the lodge and timeshare sectors—strongly backed the ASA’s findings.

“Our experts at the Holiday Park Advice Centre fully agree with the ASA’s ruling,” he said. “Advertising that is unclear, misleading, and code-breaching—especially when it involves hundreds of thousands of pounds—is completely unacceptable.”

Wilson warned that the holiday park sector is “rapidly gaining the same toxic reputation that plagued the timeshare industry for decades,” adding: “Park operators can charge more than timeshare vendors, yet face far less regulation. That’s a problem for consumers.”

What this means for buyers

The ruling raises serious concerns about the transparency of lodge and holiday park investments, especially those presented as property-backed or income-generating opportunities.

Potential buyers are urged to exercise caution and seek independent legal or financial advice before committing to high-value investments in leisure properties.

Anyone who believes they’ve been misled or mis-sold by a holiday park or lodge company may be entitled to compensation. According to ECC, skilled legal professionals are increasingly successful in helping clients recover funds from misleading or unfair sales practices.

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Luxury Lodge Estates censured over misleading investment claims in Sunday Times advert

Poorly designed and inadequately maintained workplaces are draining the UK economy of more than £71 billion a year, according to new research from facilities and security services company Mitie.

A survey of 3,000 UK employees conducted by the firm reveals that workers are losing, on average, 68 minutes each week to minor but recurring inefficiencies—such as trying to find a meeting room with reliable internet access or waiting for slow lifts.

These seemingly small frustrations, when scaled across the entire UK workforce, are costing employers an estimated £485.2 million in lost salary productivity every week. Over the course of a year, this translates to a staggering £71.4 billion economic hit.

The findings point to a critical link between the quality of workplace design and employee performance. More than half of respondents (51 per cent) cited a poorly maintained workplace as one of the leading causes of job dissatisfaction. Conversely, 88 per cent said a safe and functional working environment directly contributed to their overall job satisfaction.

The data also suggests a strong correlation between employee contentment and their perception of their employer. Nearly 90 per cent of workers who were satisfied with their physical workplace were also satisfied with their employer. In contrast, only 23 per cent of those dissatisfied with their surroundings felt positive about their organisation.

Mark Caskey, managing director of projects at Mitie, said: “Across the UK, office environments are riddled with friction points that undermine both satisfaction and productivity. But the good news is that many of these issues are entirely within the employer’s control—such as ensuring tech works seamlessly and that spaces are fit for both collaboration and quiet work.”

The report also challenges the assumption that recreational perks, such as office gyms and social areas, are major drivers of employee wellbeing. Just 29 per cent of those surveyed said such amenities meaningfully contributed to their job satisfaction, suggesting that functionality trumps flashiness when it comes to workplace design.

Caskey added: “When workplaces are designed with people in mind and managed effectively, they become powerful enablers of collaboration and transformation. They’re not only more productive and satisfying—they’re places people want to be. That’s good for staff retention, good for business and, ultimately, good for the wider economy.”

The research adds weight to the growing call for employers to reassess how their physical environments are supporting—or undermining—staff performance. With hybrid work models becoming the norm, businesses that fail to invest in purposeful, user-friendly office design may find themselves facing hidden costs in the form of disengaged teams and underwhelming output.

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Poorly designed offices cost UK economy over £71bn a year

Retail leaders have issued a stark warning to chancellor Rachel Reeves that plans to hike business rates for large retailers could drive up food prices, fuel inflation, and weaken the UK’s already fragile high streets.

Helen Dickinson, chief executive of the British Retail Consortium (BRC), which represents more than 200 major retailers, has criticised Treasury plans to increase charges on properties with a rateable value above £500,000. The changes, set to come into effect from April 2026, are expected to add £600 million to the tax burden of large stores and supermarkets.

“This will add to inflation at the worst possible moment,” Dickinson said, urging the government to scrap the rise and instead consider a broader reduction in business rates. “Retailers are doing everything they can to shield customers from mounting pressures, but there’s only so much they can absorb before costs start feeding through to prices.”

Her intervention follows the latest figures from the Office for National Statistics, which show UK inflation rising unexpectedly to 3.6 per cent in the year to June—its highest level since January 2024. Food inflation in particular jumped to 4.5 per cent, driven by poor harvests, disrupted supply chains, and rising operational costs.

The BRC has warned that targeting larger retailers could have a disproportionate impact on inflation, as these stores sell the majority of food and clothing across the UK. Many, it argues, already operate on tight margins and are absorbing other pressures, including the £25 billion rise in employers’ national insurance contributions introduced by Reeves in April.

A recent BRC survey revealed that two-thirds of retail CEOs intend to raise prices in the months ahead, citing rising employment and tax costs. “Families are already feeling it at the checkout,” said Dickinson. “If the chancellor presses ahead with this tax raid, it will heap pressure on businesses already at breaking point.”

The proposed reforms are part of a broader effort by Reeves to rebalance the business rates system and ease the burden on smaller retailers. The Treasury has argued that large stores and department chains can afford to pay more, and that the change will help save the UK’s struggling high streets.

Business rates are calculated by applying a multiplier to the annual rental value of a property. Under the new regime, that multiplier would increase for high-value premises, hitting an estimated 4,000 larger stores. While smaller independent shops could benefit from lower rates, the BRC fears the cost will ultimately be passed onto consumers at a time when inflationary pressure remains acute.

Economic headwinds continue to mount for the chancellor, who is facing a £5 billion hole in fiscal headroom following the reversal of winter fuel cuts and delays to welfare reform. With pay growth slowing and unemployment rising to 4.7 per cent—the highest in four years—the timing of any tax rise is under increasing scrutiny.

Dickinson has called on ministers to rule out any further taxes that could act as a drag on investment or growth in physical retail, and to prioritise stability as the economy navigates a delicate recovery.

“These stores are not only critical to keeping food affordable; they anchor high streets, support jobs and draw footfall for neighbouring small businesses,” she said. “Ministers must choose: support families and high streets, or add to inflation at the worst possible moment.”

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Retail leaders warn business rates hike will push up food prices and hurt high streets

Burberry’s chief executive has called on the UK government to reinstate VAT-free shopping for international visitors, arguing that Britain could reclaim its title as Europe’s leading luxury retail destination.

Joshua Schulman, who joined the iconic British fashion house last year, said overseas shoppers were still avoiding the UK due to the absence of a VAT refund scheme — a policy scrapped in 2021 following Brexit. “International consumers are not shopping in the UK to the extent that we would like,” he said, urging ministers to reintroduce the tax relief.

Speaking after Burberry posted its best sales performance in 18 months, Schulman described VAT-free shopping as “a real lever for growth” that would benefit the entire luxury and retail sector. “This is a great opportunity for the UK to become the number one shopping destination in Europe,” he said.

Burberry’s share price jumped nearly 6 per cent on Friday following Schulman’s comments and a trading update that suggested his turnaround plan, dubbed “Burberry Forward”, is beginning to show results.

The removal of the VAT scheme — which previously allowed non-EU tourists to reclaim the 20 per cent sales tax on purchases — has long been criticised by retail and hospitality leaders. Competitor destinations such as France and Italy still offer tax-free shopping, giving them an edge in attracting high-spending visitors.

Helen Brocklebank, CEO of Walpole, the official body for the UK’s luxury sector, has previously described the scrapping of VAT-free shopping as a “crazy, wrong-headed decision”. The last Conservative government declined to restore the scheme following a review by the Office for Budget Responsibility, which claimed its removal would save the Treasury £540 million a year and that reinstatement would cost £2 billion by 2025-26.

The Labour government has so far held firm. A Treasury spokesperson said: “There are no plans to introduce a new tax-free shopping scheme in Great Britain.” However, tourists may still claim VAT relief if items are shipped directly to their home country.

Industry sources argue that ministers are underestimating the broader economic benefits of reviving the scheme — including increased footfall, tourism spending, and job creation. Schulman noted that British brands are struggling to compete internationally without it and that the policy shift would benefit the entire high street, not just luxury players.

Despite tough conditions, Burberry showed signs of stabilisation in the three months to 28 June. Comparable retail sales fell by just 1 per cent, a marked improvement from a 6 per cent decline the previous quarter and a 21 per cent slump a year earlier. Total revenue dropped 6 per cent to £433 million, partly due to a 4 per cent currency headwind.

The company credited seasonal demand for lightweight outerwear, wellies, scarves and pool slides, alongside high-impact marketing campaigns featuring the Gallagher family and exclusive events with King Charles’s Highgrove estate, for its stronger showing. A new wave of younger, festival-going luxury consumers — coupled with Burberry’s loyal traditional clientele — is also helping the brand broaden its appeal.

Burberry’s trial of in-store “scarf bars” proved successful, with 200 planned globally. Schulman also pointed to “stabilisation” in China, which accounts for around 30 per cent of sales, and modest growth in Europe and the US.

Still, he acknowledged that the brand is in the early stages of its turnaround. Burberry is on track to deliver £80 million of its £100 million cost-saving plan this year, including the controversial decision to cut 1,700 jobs — a quarter of its UK workforce — over two years.

Schulman, who previously led Coach and Michael Kors, has committed to restoring Burberry’s image as a symbol of “timeless British luxury” with a focus on outerwear and heritage pieces. His leadership has already lifted the company’s share price by 66 per cent since his arrival, though it remains below previous highs.

Commenting on the outlook, he said: “It’s a tough macro environment out there and we’re taking things step by step, but we’re optimistic about the quarters ahead.”

Analysts remain cautiously hopeful. Garry White, chief investment commentator at Charles Stanley, said Schulman’s focus on product refinement and digital strategy “appears to be stabilising performance”. But Deutsche Bank warned that future growth will depend on whether Burberry can replicate the success of its core categories across new product lines.

For now, the return of VAT-free shopping could offer a powerful tailwind not just for Burberry, but for the entire UK retail and tourism ecosystem.

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Burberry boss calls for VAT-free shopping return to boost UK retail and tourism