I reproduce the following from the Amazon UK web site, which you can access if you try to by a CD:
Buying from Amazon's Preferred Merchant, Indigostarfish.com
Indigostarfish.com is an independent Jersey-based merchant offering to supply goods to UK customers via the Amazon.co.uk website. Orders placed with Indigostarfish.com are subject to the Indigostarfish.com Terms & Conditions.
- To order a product from Indigostarfish.com, click the "Add to Basket" button or 1-click button as you would for a regular Amazon.co.uk order. Once you've placed your order, Indigostarfish.com will dispatch the item directly to you in accordance with their standard terms and conditions a copy of which are available here: Indigostarfish.com Terms & Conditions.
- If you can't see the message "Items for dispatch to UK will be sold by Amazon's Preferred Merchant." in the availability message on the product information page, the item isn't sold by Indigostarfish.com.
- Should you experience any problems with your Indigostarfish.com order or if you require a refund, please contact us and we will arrange for your refund to be processed by Indigostarfish.com on your behalf in accordance with their standard terms and conditions.
- Indigostarfish.com is a fully-licensed and independent Jersey-based company; as an Independent Merchant trading on the Amazon platform it is required to comply with strict operating parameters and is entirely committed to offering its customers the best selection at the lowest prices.
- Goods sold by Indigostarfish.com by way of personal import are "Community Goods" (i.e. in free circulation in the customs territory of the EU) and should not therefore be subject to customs duties when you import them from Jersey to the UK. They can only be dispatched to locations within the UK (England, Northern Ireland, Scotland, Wales and all BFPO addresses) and the Channel Islands.
- Ownership and risk in the goods will transfer to you when the goods are dispatched from Jersey on your behalf by Indigostarfish.com.
- Indigostarfish.com will only dispatch Orders placed on the Amazon.co.uk website to the UK.
- If you order an item that is messaged as being sold by Amazon's Preferred Merchant for dispatch to anywhere other than the UK, you are placing your Order with Amazon.co.uk. This will be subject to Amazon.co.uk's terms and conditions, and the appropriate VAT charges for the destination country will be applied to the order. Click here for more information.
Why this weird structure? Simple: it’s all about tax abuse, nothing else. I’ve referred to VAT abuse on the trade ion items shipped from Jersey to the UK costing less than £18 many times before. It was dealt with in Parliament earlier this year:
VAT: Channel Islands
Mrs. Gillan: To ask the Chancellor of the Exchequer what estimate he has made of the effect on value added tax (VAT) revenue of VAT-free goods coming through the Channel Islands into the UK in each of the last three financial years. [256410]
Mr. Timms: We estimate that the cost of the Low Value Consignment Relief on imports from the Channel Islands was around £70 million in 2006-07 and £80 million in 2007-08.
Insufficient data are available to produce comparable estimates for the year 2005-06.
Mrs. Gillan: To ask the Chancellor of the Exchequer what steps he is taking to prevent value added tax-free goods entering the UK from the Channel Islands. [256476]
Mr. Timms: Over the last three years the Government have worked with the authorities in Jersey and Guernsey to address this issue. As a result, and to avoid potential damage to their international reputation, the authorities in Jersey and Guernsey have taken a number of steps to restrain the exploitation of the low value consignment VAT relief by UK companies. These are set out in detail in my speech to the House on 27 January 2009, Official Report, columns 275-76.
So here you see what Mr Timms referred to in action: Amazon does not ship from Jersey because Jersey no longer lets it do so, so it just contracts that a locally owned company does it for it instead.
All the items shipped are likely to have previously left the UK. They will return to the UK. This wholly uneconomic act can only be justified by the tax saving.
The tax saving is generated because no VAT is charged on the re-import of the goods in question.
This is blatant tax avoidance, in the UK and Jersey.
Why is it tolerated?
Why do we allow the loss of hundreds of millions a year as a result?
Let’s stop this now.
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I do hope that nobody who objects to this “abuse” has ever even thought of paying a tradesman cash in hand to save on the VAT.
Where is the moral justification for VAT? It is just an another tax based on no principle but expediency. Now it is proving itself less than expedient. People and goods are mobile. Of course there is a temptation to avoid paying tax on that which can move.
The solution is in the hands of those governments that are now losing revenue through tax competition. If taxation is levied on things that cannot move, then revenue will not be lost. Local councils don’t lose their Council Tax to adjacent councils were the rate is lower. UBR revenue doesn’t leak to the Channel Islands.
Why can’t the authorities understand this and legislate accordingly?
There is also the even more blatant VAT avoiding scheme operated by those special shops at international ports.. where if (for example) you were to purchase a big wide screen TV before jetting off on your holiday, you won’t need to worry about dragging the box around with you because the shop will deliver your purchase right to your UK address after you return! Oh yes.. and you don’t pay VAT.
Oh yes I had forgotten about duty-free shops. But it would be stupid to buy things like electronic goods from them. How would one get them repaired? What if they were faulty? What about the guarantee?
Nevertheless, why do governments have taxes which are so easily avoided when it is possible to raise revenue from taxes which cannot be avoided or evaded? Are they really serious? It is stupidity, or is a desire to soak the honest poor?
[…] Jersey VAT issue I noted here very recently appeared in the Observer today: The billionaire Barclay brothers are […]
[…] Jersey VAT issue I noted here very recently appeared in the Observer today: The billionaire Barclay brothers are […]
does anyone have a telephone number for this company. I am waiting for a dvd and Amazon have no knowledge of the order !!!!!!!!!!!!!!!!!!!
Well, it won’t be long before all video and music content is distributed digitally and then we will all be able to celebrate being able to buy entertainment without paying VAT. After all, if a US company makes a product as good as The Wire and a viewer in the UK happens to watch it – what has the UK government done to deserve a cut?
Paul
Clearly you don’t know much about the EU distance selling directive, or you’d realise how very wrong you are…..
Richard
[…] retail web company, for example. Amazon makes prolific use of the VAT avoidance loophole, as is detailed at Tax Research UK. Amazon is able to exploit this loophole because it is so large, and through economies of scale can […]