Laws to get rid of #2: Low Value Consignment Relief

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The ConDem government has launched a new web site – called Your Freedom – that is dedicated, it says, to scrapping unnecessary laws.

I think there are a considerable number of laws that threaten my future liberty by preventing the collection of proper taxation payments from those who owe them, so meaning I and the rest of the population of this country will have to suffer cuts in services we can ill afford. I’ve already suggested one; here’s my next.

Low Value Consignment Relief (LVCR) relates to the import of goods, very largely from the  Channel Islands on which VAT is not charged because of the exemption provided in UK law, and allowed under EU law, which permits with a sale value of less than £18 to be imported VAT free, even though VAT would be due on such imports if worth more than £18.

The relief has been massively abused, in my opinion. Most major retailers from Amazon to Tesco to Debenhams abuse the relief, either themselves or through independent fulfilment houses to whom their orders are re-directed. Those fulfilment houses ship goods from the UK, largely to order, and then post them back again. The export from the UK is VAT free. The return is VAT free and the UK High Street price including VAT is undermined, so undermining UK tax revenues by more than £100 million a  year, undermining the UK High Street by forcing shop closures and undermining UK jobs as a result: a massive triple whammy.

This abuse could be stopped vey simply. The LVCR limit could be reduced to the minimum level allowed by the EU – at under £10. And a £5 minimum collection fee could be charged by the Post Office for collecting the tax. The market for re-shipped goods and services would end over night and the UK would be a richer, more employed and more invigorated place as a result.

So, in the bin goes LVCR.

 

 

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