Shoppers can hop on the Eurostar to Paris and save a small fortune by avoiding Britain’s outrageous VAT levies
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The elegant expanse of the vast square that is Place Vendôme in central Paris is bathed in spring sunshine.
On one side stands The Ritz hotel, where well-heeled guests glide in and out, many with shopping bags on their arms.
Dotted around the rest of this particularly desirable corner of the French capital are an array of boutiques, the names of which are familiar the world over: Cartier, Dior, Piaget, Gucci and, of course, Louis Vuitton.
Outside the last of these are rope barriers, behind which shoppers queue patiently to be allowed in. A few steps along the neighbouring Rue Saint-Honoré, it is much the same at Dior’s flagship store.
What is most curious about these shoppers is their nationalities: Chinese, American, Malaysian, British. If only they were preparing to spend pounds rather than euros on a classic Vuitton ‘Neverfull’ bag or a pair of Prada sunnies. But sadly not.
Beth Hale pops under the Channel for a trip to the shops in Paris, saving herself thousands compared to London’s shopping scene
For as British retailers are painfully aware, Paris offers something London’s Bond Street can’t compete with: VAT-free shopping.
Spend more than €100 on fashion in Paris and shoppers from outside Europe are entitled to a tax refund that typically amounts to around 12 per cent.
(VAT in France, as in the UK is 20 per cent, but 12 per cent is the typical figure refunded, after administration fees.)
No wonder so many British captains of industry say the UK has been left floundering.
Chanel classic bag, lambskin. Price in Paris: £8,562.92 (€9,700). Tax refund: £1,027.55. New price: £7,535.37. Price in Britain: £8,530. Saving: £994.63
Dior Brandenburg fitted jacket. Price in Paris: £4,238.90 (€4,800). Tax refund: £508.67. New price: £3,730.23. Price in Britain: £4,300. Saving: £569.77
Louis Vuitton Neverfull MM bag in black and beige. Price in Paris: £1,906.79 (€2,160). Tax refund: £228.81. New price: £1,677.98. Price in Britain: £2,040. Saving: £362.02
Louis Vuitton x Yayoi Kusama Neverfull MM Tote Bag. Price in Paris: £2,003.90 (€2,270). Tax refund: £240.47. New price: £1,763.43. Price in Britain: £2,130. Saving: £366.57
This week, the Mail launched a Scrap The Tourist Tax campaign with an open letter to the Chancellor, signed by 100 business owners, all of whom are urging the Government to rethink its decision to scrap the long-standing tax-free scheme.
When the Mail visited yesterday, tax-free Parisian retail was booming.
Outside Dior’s flagship store on Paris’s immaculate Rue Saint-Honoré is Mona, a 29-year-old Arab-American from California.
‘I prefer to come to Paris to buy stuff from places like Chanel or Dior,’ she says. ‘I definitely pick Paris over London for shopping as it’s much cheaper . . . We are a big family so on any given trip we can save up to €1,000 thanks to the tax refund.’
Data company Global Blue says tax-free spending by American visitors to the UK has only rebounded to 104 per cent of pre-pandemic levels in the first three months of this year; in France, it is 313 per cent.
Blue Versace Greca-plaque leather belt. Price in Paris: £371.48 (€420). Tax refund: £44.58. New price: £326.90. Price in Britain: £390. Saving: £63.10
De Beers 18ct yellow gold and 3.85ct diamond medallion pendant necklace. Price in Paris: £27,304.63 (€30,800). Tax refund: £3,276.55. New price: £24,028.08. Price in Britain: £26,500. Saving: £2,471.92
Dior J’Adior slingback pump. Price in Paris: £873.95 (€990). Tax refund: £104.87. New price: £769.08. Price in Britain: £870. Saving: £100.92
Isabel Marant green Lara Mini Dress. Price in Paris: £875.46 (€990). Tax refund: £105.05. New price: £770.41. Price in Britain: £1,000. Saving: £229.59
De Beers White Gold and Diamond Snow Dance Bracelet. Price in Paris: £19,541.15 (€22,100). Tax refund: £2,344.94. New price: £17,196.21. Price in Britain: £19,000. Saving: £1,803.79
What’s more, transactions by UK shoppers, who hop across the Channel to continental Europe (it took me just two hours and 20 minutes to get from London to Paris by Eurostar), rocketed from €160 million in 2021 to €486 million in 2022.
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In 2019, the UK was among the top-ten most visited destinations in the world, with visitors generating £28 billion of revenue.
Paul Barnes, CEO of the Association of International Retail, says: ‘Britain was the premiership, but we have effectively relegated ourselves to the second division.’
He tells the story of a hotel boss in London’s Park Lane, who welcomed a family from the Middle East, paying for three or four rooms for a two-week stay. For three days of that stay the family went shopping — but not in nearby Harrods or Selfridges or Sloane Street. No, they got on the Eurostar for a three-day shopping spree in Paris.
When I visit the Louis Vuitton store there, the store is buzzing with young shoppers from across the globe.
‘Mostly, we see Americans,’ the shop assistant tells me. ‘They have always had their love affairs with Paris, but over the past few months, the number of Chinese visitors has been building.’
There is no visible signage about tax refunds; that would be considered far too vulgar in a store in which price tags aren’t deemed essential. ‘We don’t have to tell people about the refund, they already know,’ says the assistant with a smile.
In Dior’s jewellery boutique, it’s a similar story. There are no prices on display, but a potential 12 per cent discount on gems costing thousands of euros is a sure-fire way to land a lucrative sale.
Chloe Small Leather Marcie Saddle Bag. Price in Paris: £781.11 (€890). Tax refund: £93.73. New price: £687.38. Price in Britain: £950. Saving: £262.62
Balenciaga Hourglass XS black crocodileeffect top handle bag. Price in Paris: £1,901.71 (€2,150). Tax refund: £228.20. New price: £1,673.51. Price in Britain: £2,030. Saving: £356.49
Black Prada square sunglasses. Price in Paris: £274.76 (€310). Tax refund: £32.97. New price: £241.79. Price in Britain: £315. Saving: £73.21
Chanel ballet flats. Price in Paris: £785.96 (€890). Tax refund: £94.32. New price: £691.64. Price in Britain: £780. Saving: £88.36
In France, as elsewhere in Europe, getting a tax refund is designed to be a slick process for the international shopper.
Just around the corner from Dior, Global Blue operates a discreet tax-free concierge service, at which invited shoppers, directed there by the boutiques, can have a personal shopping experience with a difference.
At the company’s second-floor lounge, customers walk out with cash rather than shopping bags — a 12 per cent tax refund can be generated in minutes.
Typically, it’s 15 to 20 minutes, says lounge manager Anna Sorokopouck, who ensures each visitor is offered refreshments (champagne if desired) and the option to have a tax refund generated in cash or put on a credit card.
When the Mail visits, there is a steady flow of customers. It’s 2pm and already Anna has welcomed shoppers from the Philippines, Malaysia, Ukraine, the U.S. and, yes, Britain.
‘We see around 100 to 150 clients a day,’ says Anna. ‘I’ve customers who will come in every day of their stay.’
Sitting on comfortable sofas, shoppers simply present the sales slip paperwork that needs to be requested when making any purchase (to do this the store needs to see the shopper’s passport) and a credit card. Global Blue operates similar lounges in Milan, Barcelona, Florence and Rome, but not, of course, London.
TOTAL SAVING OVER 13 ITEMS, MINUS COST OF EUROSTAR RETURN (£78) = £7,664.99
VAT is charged as a percentage rate of the net price, which is the price before the tax is applied.
In France, where VAT is 20 per cent of the net price, then this is equal to 16.67 per cent of the gross price, which is the price actually paid by you in store.
Hence, if you made a €100 purchase in a French shop, the VAT amount would actually be €16.67. Unfortunately, you will never be able to receive 100 per cent of the tax amount back, as the services you use to receive your tax refund will usually charge a substantial commission — meaning you will look to reclaim about 12 per cent.
The savings here are calculated on the basis that shopping in France will save you 12 per cent off the purchase price.
The benefits of tax-free shopping are not just for those with oodles of cash spare to splash out in designer boutiques.
Department stores in the French capital also have dedicated offices where shoppers can process their tax-free refunds.
Galeries Lafayette, which with its roof terrace looking out over the Paris Opera House is a destination stop for tourists, promotes its tax refund service with a slick video on it website — in English, of course.
Shoppers can choose cash in store, a refund to a credit card, a deferred payment via an app or have cash refunded to them at the airport on departure.
The process is almost entirely digital (documents can be scanned at designated machines) making it a streamlined business.
At the end of a Parisian shopping expedition, a few international visitors are gathered at the self-service détaxe counters at Gare du Nord to process their tax refunds.
A young American couple smile as they show off their Louis Vuitton shopping bags and two Rimowa suitcases.
How much are they saving? ‘About €900,’ says the young businessman.
‘We came over just for the day,’ says his partner.
‘We are actually on holiday in the UK. Five years ago I used to shop in London, but it’s cheaper to come here now.’
And therein lies the crux of the problem.
Additional reporting: Rory Mulholland, Sarah Rainey and Emma Mesquita
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