Luxury department store chain Selfridges has urged UK Prime Minister Andy Burnham to restore VAT-free shopping for international tourists, arguing that the policy could help revive British high streets and support regional economic growth.
The call came as Selfridges reported a sharp rise in operating profit, with the retailer which operates stores in London, Birmingham and Manchester saying stronger in-store sales and improved margins helped offset weaker online trading.
Selfridges Group chief executive André Maeder said the retail sector was operating in a difficult economic environment, which had been compounded by government policy decisions, including the abolition of tax-free shopping for international visitors.
“We are therefore hugely encouraged to see this back on the political agenda and urge the government under new Prime Minister, Andy Burnham, to bring back tax-free shopping, boosting high streets and unlocking growth across the whole of the UK,” Maeder said.
The UK abolished the VAT Retail Export Scheme in 2021, meaning most international visitors can no longer claim VAT refunds on goods purchased in British stores and taken home in their luggage.
Selfridges’ intervention adds to growing pressure on Burnham’s government to reconsider the policy. Luxury fashion group Burberry and British handbag maker Mulberry have also called for the restoration of tax-free shopping for international visitors.
The Conservatives have also pledged to reverse the policy if they return to government. Business leaders from the tourism, retail and hospitality sectors have backed the proposal, arguing that tax-free shopping could strengthen Britain’s position as an international destination.
Selfridges Profit Jumps 88%
Selfridges’ call came alongside the release of its latest financial results where the retailer recorded an 88% increase in operating profit to £79.7 million for the 12 months to January 3, 2026, compared with £42.2 million in the previous year.
Revenue rose 7% to £830.8 million, helped by stronger sales and footfall across its four UK stores. However, online sales declined as the company shifted its focus towards higher-margin products and improving the profitability of its physical stores.
Selfridges Retail Limited also reported a £13 million pre-tax profit, reversing a £15.9 million loss recorded in the previous year.
The company said the improvement reflected stronger margins and tight cost control, despite what Maeder described as difficult retail and macroeconomic conditions. Across the wider Selfridges Group, including sales from brand partners, revenue reached about £1.6 billion.
Selfridges already offers international customers a tax-free shipping service, under which UK VAT can be deducted when goods bought in-store are shipped to an overseas address. However, this differs from the former tourist VAT refund system, which allowed eligible international visitors to take qualifying purchases home with them after shopping in British stores.
Selfridges is owned by Thailand-based Central Group which owns 60% and Saudi Arabia’s Public Investment Fund which owns the remaining 40% having acquired the retail chain from the billionaire Weston family in 2022 in a deal reportedly valued at about £4 billion.
