Britons flock to European hotspots to snap up designer goods

2022-07-03

Jimmy Choos cruise! Britons flock to European hotspots to snap up designer goods then reclaim a fifth of the cost thanks to tax loophole

Trips have been dubbed ‘Jimmy Choos cruises’ after the ‘booze cruises’ to Calais
The VAT rebate has been available to UK tourists only since Britain left the EU
UK travellers already accounted for more than €1 in every €20 claimed back

Soaring numbers of British holidaymakers on shopping sprees in European cities are claiming millions of pounds in VAT thanks to a tax loophole.

They can get up to a fifth of the cost of their purchases back within days of returning home.

Thierry Andretta, chief executive of high-end fashion firm Mulberry, told The Mail on Sunday that he had encountered travellers on the journey back to the UK laden with luxury shopping worth thousands of pounds.

He said the shoppers were candid about the fact that the money returned through the rebate was enough to cover the cost of the fare, food and accommodation.

The trips have been dubbed ‘Jimmy Choos cruises’ after the ‘booze cruises’ to Calais in the 1970s and 1980s, when Britons flocked to France to buy duty-free wine, beer and spirits.

Soaring numbers of British holidaymakers on shopping sprees in European cities are claiming millions of pounds in VAT thanks to a tax loophole

The VAT rebate is available to international travellers visiting Europe – but has been available to UK tourists to the Continent only since Britain left the EU.

The bulk of the transactions are from high-spending Middle Eastern, Chinese and US shoppers – but Global Blue, the Swiss tourism shopping tax refund company that process the rebate, said UK travellers already accounted for more than €1 in every €20 claimed back.

Derrick Hardman, Global Blue managing director in the UK, Ireland and Finland, said: ‘We are seeing UK residents start to take advantage of this.

‘People haven’t really been aware of previously, but I think over the summer months it will become more prevalent as people realise what is going on. There are big retailers in Europe who are targeting UK travellers.’

Retailers advertise the saving to travellers at airports in Spain and Italy. France is also a hotspot.

A banner at an Italian airport read: ‘More reasons to smile – UK customers can claim their taxes back.’

They can get up to a fifth of the cost of their purchases back within days of returning home.

In Spain, department store giant El Corte Ingles has been offering a 10 per cent shopping voucher on top of the saving to British tourists arriving in Madrid and Barcelona. It said the saving on purchases of more than €154.95 would exceed 25 per cent.

UK travellers are obliged to declare any goods purchased overseas at UK border control. A VAT charge of 20 per cent is applied on goods over £135.

But Mr Andretta said the savings of shopping in Europe can still be substantial. He estimated the cost of many French and Italian luxury items was around 15 per cent more in London where retailers have to absorb the substantial cost of the highest business rates in Europe and eye-watering rents into prices.

‘More and more, I see people making the most of this. You see them returning from Paris and it’s evident they’ve been on a shopping weekend,’ he said.

A banner at an Italian airport read: ‘More reasons to smile – UK customers can claim their taxes back’

He claimed UK shops were missing out after Chancellor Rishi Sunak closed a similar loophole for international tourists visiting here, adding: ‘It’s frustrating because we are missing the opportunity.’

He said shops on the continent ‘are enjoying this and we’re not’.

There is already evidence that some high-spending foreign visitors are taking their custom to Paris and Milan.

Mr Hardman said it led to the ‘cannibalisation of businesses’ in the UK, adding: ‘It’s a shame the Government took this away.’

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