Story Highlight
– Politics negatively impacts the watch industry and businesses.
– Tax system threatens entrepreneurialism and competitiveness in Britain.
– U-turns on taxes follow effective protests from various sectors.
– Luxury watch profits decline due to increased business costs.
– Retailers must unite to challenge rising costs and taxes.
Full Story
A recent commentary by Rob Corder, the editor-at-large of WatchPro, highlights the pressing concerns facing the UK watch and jewellery industry amid fluctuating economic conditions and government tax policies. Corder expresses a preference to avoid political commentary unless it adversely affects the sector he aims to champion.
He notes the integral role of public services—such as healthcare, education, and policing—in supporting industries and individuals alike. However, Corder warns that an imbalanced tax system can stifle entrepreneurship, deter investment, and inhibit job creation, ultimately harming the competitiveness of UK businesses.
Recent decisions by the government appear to indicate a recognition of these challenges, demonstrated by policy reversals concerning tax increases on farmers and pubs. Corder argues that the repercussions of declining sectors extend beyond those directly involved, affecting the entire economy.
The effectiveness of protests in prompting these government U-turns has been evident, with notable demonstrations involving farmers and publicans making headlines. In contrast, the luxury watch and jewellery sector has struggled to garner similar attention regarding issues like the proposed removal of VAT rebates for international shoppers.
A campaign aimed at abolishing the so-called Tourist Tax has encountered stagnation, despite support from influential retailers, including Harrods and Watches of Switzerland. The campaign’s future remains uncertain as stakeholders await a more conducive political climate for reviving their efforts.
Without such renewed advocacy, the consequences for the industry are apparent, with operating profits among leading UK jewellers on the decline. The top five mid-market jewellery companies reported lower earnings than a decade ago, although luxury brands have sustained better margins due to heightened global demand for top-tier watch brands.
Looking ahead, profits in the jewellery sector may face additional strains due to a combination of an easing economy and rising operational costs. Significant changes forthcoming from April 2026 will bring increased business rates rooted in property market trends, alongside the removal of previously available tax reliefs.
Retailers will find themselves facing a new, less favourable framework of business rates, with large establishments in premium locations hit particularly hard by an extra tax burden on properties valued over £500,000.
The absence of tax-free shopping for overseas visitors is another sore point, with London’s West End reportedly losing £310 million in the first half of 2025 alone—a staggering increase attributed to lost revenue since the changes took effect. Research estimates total losses to the retail and hospitality sectors in this area at around £1.4 billion since 2023.
Despite the significant impacts of the Tourist Tax and rising business rates, the ramifications extend beyond London, affecting retailers across cities like Manchester, Leeds, and Edinburgh.
While farmers and publicans have succeeded in reducing the impact of recent tax increases, the call to action now falls to retailers. Organising efforts that compel government decision-makers to take note of the pressures faced by the retail sector—especially at the luxury level—could prompt necessary discussions. Although restricting access for MPs in premium shopping districts may lack the resonance of similar actions taken by publicans, it could still initiate critical conversations around the sustainability of the UK’s esteemed retail landscape in light of escalating costs.
