I am aware there are those who argue that Jersey and Guernsey don’t want businesses that exploit Low Value Consignment Relief (LVCR) — the VAT rule that allows goods costing less than £18 to be imported into the UK VAT free.
I don’t believe them. Take this Jersey web site as indication of true attitudes:
Something tells me that Jersey and Guernsey just aren't making the most of Low Value Consignment Relief (LVCR). Yeah, sure there are a few select individuals that have set themselves up for a very comfortable retirement - Play.com, Moonpig and MyMemory being ones that spring to mind. But, with the barriers to entry for creating an e-commerce store so low, there must be a number of niche areas yet to be explored.
As they put it:
Now... go forth and brainstorm! Think of products that you could start selling. Let's give our islands an alternative to the finance industry!
So let me do two things. The first is to remind them that this law can be changed. The second is to remind them that when such laws are changed the impact on the islands can be significant. Watch the BBC programme ‘Who do you think you are?’ on Monty Don for some illumination. Start at around 40 minutes in. Don is related to the Keiller family who created marmalade. In 1857 the Keillers set up a factory in Guernsey to make marmalade to get round the sugar tax. But then the sugar tax ended. And with it went the Keillers from Guernsey.
Tax exploitation is not the basis on which to build prosperity.
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I totally agree – if a business plan doesn’t work without a tax break, it doesn’t work at all!
Firstly, thanks for reading and quoting my blog.
Just to balance the argument, both Channel Islands have put in significant laws to reduce the impact of LVCR on the UK. E-retailers must be locally based and managed, and a stop has been put on large UK companies using the islands solely for distribution.
Plus why does everyone concentrate on Jersey and Guernsey when there are lots of other jurisictions doing the same thing like Hong Kong for example?
@Phil de Gruchy
Might I suggest your comment a little disingenuous?
As you well know the business has continued unabated – local companies now appearing to act as agents for all the major companies
Nothing has changed
As is usual in the Channel islands – the law has simply been sidestepped
And please don’t say “it wasn’t me – it was him” – my seven year old does that. It doesn’t work for him. Why should it for you?
@Phil de Gruchy
The Channel Islands are the main source of this abuse and the so called laws introduced to limit it do no such thing. They are laws designed to allow its expansion whilst ‘protecting the integrity’ of the Islands. Only CDs and DVDs have been limited which is totally pointless as the entire mail order CD and DVD industry is already offshore so there is nothing to limit. And in any case, Amazon doesn’t have a licence and they sell through Jersey using a dodge known as a ‘preferred partner’ I’ve seen the advice from Jersey Trust companies. Its a scam.