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Blame the taxes: Mulberry won´t expand in the UK

25 Feb 2011

Fashion

Those who already signed in for the waiting list to achieve one Tillie or Alexa handbags will have to wait longer as Mulberry CEO has just put off the opening of a second factory in the UK due to the national tax scheme. Godfrey Davis,

the chief executive of Mulberry, has had to refuse opening a second factory in Great Britain – there is already one in Shepton Mallet , Somerset, due to an expensive business tax system. This announcement happened to be made shortly after Samantha Cameron wore a Mulberry dress to mark the start of London Fashion Week, and spoke of the importance of the fashion world in helping economic growth in the UK. It was, the Prime Minister's wife added, "one of our most important industries".

Ho
wever, brain behind the uber pursued Alexa and Tillie bags is reproving UK tax rates to be punishing and effectively prevented the brand from opening a second factory in the country. He said that Mulberry had been mulling introducing another in the UK next year, but the impact of rising National Insurance rates on its operating costs had convinced it not to.

According to The Independent, Mr. Davis wants "NI holidays" for manufacturers to open factories in this country. Employers will make NI contributions of 13.8 per cent for those earning more than £136 a week from April, up from 12.8 per cent. IN the same vein, he added: "If NI is put up to 14 per cent, every minute we are paying 14 per cent [of staff wages] to the Government in tax."

Telegraph reports that the Treasury already offers an NI break for new start-ups, but it has been so poorly advertised that only 1,500 businesses have benefited out of the 400,000 or so which could qualify.