The Tories have taken no action to tackle Low Value Consignment Relief (LVCR) since being in office — despite the fact that abuse of this relief means that more than £100 million a year is lost in VAT as a result of the round-tripping of CDs, DVDs and other materials from the UK to the Channel Islands and back again, all in the name of tax avoidance.
George Osborne was keener on the issue when in opposition, as is clear here:
So how about it George?
When are we going to see the action to close this loophole that you were so keen to tackle when in opposition?
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[…] Now the ConDems seem to be turning a blind eye — as I noted earlier. […]
You’ll note this letter confirms the long denied fact that LVCR was allowed to the Channel Islands to expedite perishable goods through the mail (not to help Channel Island business remain competitive as has been claimed in the past). Flowers were wilting waiting for the tax to be paid so LVCR was allowed in order to prevent this. Of course it didn’t take long for some retailers to realise it would make sense to export flowers from Holland and then ship them back into the EU VAT free rather than grow them on the Island. An associate saw large containers of flowers being shipped from a UK Airport to Guernsey only to be sent back the following day. And that isn’t an abuse of LVCR ?
[…] Now the ConDems seem to be turning a blind eye — as I noted earlier. […]
@ Richard Allen
I know you have tried dilligently to EU level to get something done about this. I wish you luck. I must say, if the coalition does nothing about this, it means that nobody in power will. Having watched this nonsense in dismay for 15 years if nothing happens in the remainder of this year I will join them and ship VAT free through CI. With my luck, it will cease the following week! Because it is SUCH a blatant abuse of a fair market I have to say I suspect some form of corruption involved.
Its all in the hands of the EU now.Just waiting for a decision. If they don’t tell the UK to stop it, lets get out of the EU as VAT is a farce. By the way in 2005 I asked officials at HMRC in Whitehall if it was legal and if I could do it. They said they couldn’t possibly comment on that. Knobs.
Our LVCR apologists have been strangely quiet on this blog? I can hear pin drop.
@ Richard Allen
Well I guess if such august organisations as Tesco, HMV et al are doing it then it must be legal. Mustn’t it? 🙂
You have touching faith in the EU. A more bureaucratic, ill-conceived, wasteful organisation would be difficult to imagine but I really do hope your representations succeed and they stop this particular fiddle. Wouldn’t it be sweet if they made it retrospective and the chiseling blighters had to pay back every penny they ever evaded? I’m dreaming of course.
@ Woolley.
Who else can we have faith in ? If prisoners in Scotland can sue the UK for slopping out (breach of human rights) anything is possible…
Halifax doctrine if applied would be retrospective, and HMRC when they can be bothered apply Halifax. The Recent HMRC vs Atrium Health Club (a similar scam) resulted in a huge back tax bill. Under Halifax all VAT transactions are re-defined as if they took place in the UK.
Citipost holds a Down Stream Access licence with Postcom so as to be able to compete with the Royal Mail for bulk mail. The JCRA have decided to allow Citipost to collect mail on Jersey in the interests of “competition”. This application is soley aimed at the fulfillment market in Jersey and would make the products even more competitive against mailand supplied goods in that the postal cost would be reduced by some 50% against the previous Jersey Post pricing.
In allowing this to go forward the JCRA is openly encouraging the growth of the fulfillment sector at the expense of Jersey Post which will lose 70% of their business.
The question is that Citipost will collect the bulk mail on Jersey and take it back to their mainland processing centers where they will sort and re-label the envelopes so as to be injected into the Royal Mail for final mile delivery. Why is this element still free of VAT? Surely Citipost are providing a service that adds value to the supply chain and is aiding and abetting the fulfillment industry on the Channel Islands at the expense of mainland traders who pay their VAT on all products.
This move needs investigating.
[…] comment made on this blog whilst I was away needs to be given more attention than it will get where posted. It said, […]
[…] comment made on this blog whilst I was away needs to be given more attention than it will get where posted. It said, […]