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UK Government to Scrap VAT-free imports from Channel Islands
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Linux_User
I haven't seen my friends in so long
Joined: Tue May 05, 2009 3:29 pm Posts: 7173
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 |  |  |  | Quote: Treasury to close loophole that allows VAT-free DVDs
The government is to change the tax rules that have allowed retailers to avoid paying VAT by sending goods from the Channel Islands.
Low Value Consignment Relief (LVCR) will not apply to goods sent from the Channel Islands to the UK from 1 April.
The loophole has been used increasingly in recent years by companies selling CDs and DVDs online, such as Play.com, Tesco and Amazon.
The government said the loophole was now costing £140m a year.
The chief minister of Guernsey, Deputy Lyndon Trott, said the change would have a "significant impact" on the islands.
The maximum price of the goods allowed under LVCR was cut from £18 to £15 on 1 November following an announcement in the Budget in March.
"These reforms will ensure that UK companies, especially small and medium-sized enterprises, can compete on a level playing field with those larger companies with the resources to set up operations in the Channel Islands," said David Gauke, Exchequer Secretary to the Treasury.
LVCR was originally established as a VAT exemption for goods coming from outside the EU. The idea was to prevent EU members having to collect small amounts of VAT, when collecting it would cost more than it was worth.
The problem has been that the Channel Islands are treated as being outside the EU for VAT purposes.
'Moral market'
Big retailers have been sending low-price goods to the Channel Islands and then having them sent back individually to customers in the UK.
The government said that LVCR will continue to apply to goods coming from other countries outside the EU.
"The removal of this major market distortion should be welcomed by all UK businesses that wish to trade online," said Richard Allen, spokesperson for Retailers Against VAT Avoidance, a group that has campaigned against LVCR.
"The VAT Loophole is not only contra to the basic principles of EU VAT law but is also contrary to any sense of fair play and a 'moral market'."
Jersey's Economic Development Minister, Senator Alan Maclean, said more than 1,700 people were employed in the fulfilment industry across the Channel Islands.
Channel Island legislators are worried about the amount of the notice they have been given of the closing of the loophole. |  |  |  |  |
http://www.bbc.co.uk/news/business-15646470Good. Here's why: - The Treasury was losing revenue
- It was harming British retailers
- EU consumer-protection laws do not apply to purchases from the Channel Islands
- Jersey and Guernsey keep harping on about their independence from the United Kingdom, so let's see it in action. They've already complained about the "short notice" they've had about the closure of this loophole - well, I would just like to say, as they would - that our internal affairs are our business, not theirs.

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Wed Nov 09, 2011 12:52 am |
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l3v1ck
What's a life?
Joined: Fri Apr 24, 2009 10:21 am Posts: 12700 Location: The Right Side of the Pennines (metaphorically & geographically)
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Sure, I won't like paying more for CD's at Amazon.... But they do have a point. I never did understand why they were allowed to ship them VAT free from there.
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Wed Nov 09, 2011 9:05 am |
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Spreadie
I haven't seen my friends in so long
Joined: Fri Apr 24, 2009 6:06 pm Posts: 6355 Location: IoW
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I assume this applies to computer games from the likes of Play and Amazon too? In this climate, my purchasing of CDs, DVDs and Games has almost completely halted, so I won't be crying too much about this; as I have more pressing things to spend money one these days. In fact, I'd go one step further and applaud the move, if it heralds the closing of more noteworthy loopholes. Somehow, I doubt it will though. This could have huge impact on Play.com. Although, they might consider headquartering thier distribution arm inside London's square mile, as it is a bigger tax haven and freer from UK mainland laws than the channels islands already. [/liberalist rant] clicky
_________________ Before you judge a man, walk a mile in his shoes; after that, who cares?! He's a mile away and you've got his shoes!
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Wed Nov 09, 2011 1:04 pm |
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jonbwfc
What's a life?
Joined: Thu Apr 23, 2009 7:26 pm Posts: 17040
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Yup. well, Play and 'Indigo Starfish' anyway. Which is possibly why the original owners sold it to a japanese conglomerate a while back.... Jon
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Wed Nov 09, 2011 2:11 pm |
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paulzolo
What's a life?
Joined: Thu Apr 23, 2009 6:27 pm Posts: 12251
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Same here, sadly. If I buy games, it’s got to be in the used rack, or Platinum - so around £20. Last game I bought like this was Portal 2. So I’m behind the curve, but when games cost getting on for £40 or £50 now, it’s just not feasible. Anyway, if there are a lot of a title in the second hand games rack, I suspect the thing’s a dud and don’t buy.
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Wed Nov 09, 2011 4:21 pm |
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cloaked_wolf
What's a life?
Joined: Thu Apr 23, 2009 8:46 pm Posts: 10022
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I've already curbed my purchases of games etc. Tend to buy the odd one here and there. Blu-rays are already expensive so will have to cut back on those.
_________________ He fights for the users.
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Wed Nov 09, 2011 4:27 pm |
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