Tax 'loophole' to be investigated

Complaints about tax advantages enjoyed by some mail order retailers in the Channel Islands are to be investigated.

In Jersey and Guernsey, low value consignment relief means items less than £18 can be sold VAT-free if they come from outside the European Union.

UK retailers who cannot compete have taken their concerns to Brussels.

The European Commission's taxation division said it was in contact with the UK government about the so-called "VAT loophole".

Retailers in the UK are reported to have raised their concerns but claim they have been left "dissatisfied" with the outcome of talks.

Spokeswoman Maria Assimakopoulou from the EC taxation division said its findings would be released once the investigation was finished, but it was too early to comment further.

When the States of Jersey said it was stopping the licences of firms which distributed cut-price CDs and DVDs for major UK chain stores, Tesco moved its mail-order operations from Jersey to Zurich in Switzerland. (BBC News)

If this happens the unemployment will rise big time, there is a lot of people employed in this type of business in both Islands...

These retailers who are complaining they can't cope, are they the same retailers happy to sell goods to Jersey avoiding GST up to a value of £400? are they the same retailers and UK tax payers who'll complain when the cost of policing and collecting tax on every low value item pushes up their taxes?

Don't get me wrong, I agree that the HMR&C/EU should be allowed to collect taxes at their borders as they see fit, but anybody who points the finger at the channel islands trying to say we're at fault doesn't understand the situation and should shut up.

Channel Islanders are a funny breed. Any criticism of the status quo and the fact that we've had it EASY for the last few decades because of a skewed tax system designed by arseholes to help themselves and a whole torrent of vitriolic nonsense comes splurging out.

As the Flouquet trash has proved. We are stuck in another dimension and need sense beaten into us.

Fast Robert wrote:...We are stuck in another dimension and need sense beaten into us.

What on earth are you talking about?

If any of your criticism was in response to my post immediately before yours I'd ask you to explain yourself further as to why you disagree.

I'd suggest you explain yourself coherently to somebody before opting to beat them until they understand your vague accusations.

Nah, just a general rant.

We constantly act like we're put upon by 'dark forces' such as the EU and the UK, when in fact we've been milking a system.

Reading your post, though, you criticise people for "not understanding". What's there to understand? A loophole has been exploited - people don't like it - they want to act.

Regardless to whether the 'tax payer' will pay for the admin, an exploited loophole is an exploited loophole. The Channel Islands exist through this flawed logic. If we are to be taken seriously then we must stop attacking those that question our modus operandi (nearly all tax 'experts' in the GEP, lawyers, Giba, IoD - everyone) and cooperate.

The CIs aren't exploiting any loophole though, and aren't milking the system.

UK retailers are complaining because customers are buying from a cheaper source, cheaper because of UK/EU tax laws, not CI tax laws.

In Jersey the States took action to stop UK companies using Jersey to exploit UK tax laws; I think this was very responsible action, acting fairly in the interest of the UKs tax system because they seemed unwilling to act themselves.

The CI don't exist through the exploitation of anybody, they exist because they have, or at least were founded upon, low taxation; and not the forms of low taxation that are artificially structured to create a finance industry, low taxation through having a small infrastructure historically.

We haven't structured our income tax to attract outside investment, the major changes to Jersey's taxation in the last hundred years have been forced upon us by outside forces, or so it seems to me.

HEALTHSPAN chief executive Derek Coates, pictured, has hit back at comments made in the House of Commons about the effect a VAT concession which favours mail order companies in the Channel Islands is having on independent businesses.
He said Labour MP Janet Dean’s claim that small shops were closing had little to do with the de minimus rule.
‘The growth of internet shopping has caused a seismic shift away from bricks and mortar retailers who have to carry heavy establishment and staff overhead costs.
‘Customers are rapidly switching to direct internet suppliers from many, many locations, of which the Channel Islands are but one,’ he said.
Mr Coates said 97% of purchased single CDs were made from online suppliers and this trend would continue at an increasing rate.
Mrs Dean said that the rule, which allows items under the value of £18 to be exported VAT-free, generated £100m. a year in the Channel Islands.
Unfair and illegal competition was, she claimed, also forcing independent health food shops to close. She said Healthspan accounted for 4.9% of total UK sales in vitamins and dietary supplements.(from thisisguernsey)

I am they would be one firm that would leave the Islands if the V.A.T. rules changed...