Jersey – selling its postal system for tax abuse

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A comment made on this blog whilst I was away needs to be given more attention than it will get where posted. It said, referring to VAT Low Value Consignment Relief (LVCR) abuse by Jersey and Guernsey:

Citipost holds a Down Stream Access licence with [Jersey] Postcom so as to be able to compete with the Royal Mail for bulk mail. The [Jersey Competition Regulatory Authority] JCRA have decided to allow Citipost to collect mail on Jersey in the interests of "competition". This application is solely aimed at the fulfilment market in Jersey and would make the products even more competitive against mail and 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 fulfilment 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 centres 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 fulfilment industry on the Channel Islands at the expense of mainland traders who pay their VAT on all products.

This move needs investigating.

So I did a little more investigating. I checked the Jersey Evening Post and found this from April 2009:

The global mail business looking to compete with Jersey Post for delivering packages to the UK says that it may not need premises inJersey to conduct operations.

Citipost DSA, who are looking to compete with Jersey Post for delivering packages to the UK, say it may not need premises in Jersey to conduct operations.

The company has applied for a class one operator licence under the Postal Law to the Jersey Competition Regulatory Authority.

It wants to be able to deliver items such as CDs and DVDs to the UK for fulfilment companies based in Jersey.

The managing director of Citipost DSA, Rob Bradford, said that if a licence were granted, it was likely to use an existing third party operator to do collections and transport the packages to a port for shipping.

He said they were not looking at delivering in Jersey but providing export services for large mail producers.

It is blatantly clear that this system is being set up purely to exploit LVCR as a result. And it is equally clear that Jersey will lose out on jobs and revenue as a result – ending all gain it has from prostituting itself for this purpose.

But it gets worse. This comes from the JEP in May 2010:

SCORES more jobs will be lost, mail deliveries could be slashed to three a week and Jersey Post will be ‚Äòplunged into loss’ as a result of facing full competition as early as this summer, it was announced yesterday.

Managers at the States-owned utility told 250 stunned staff that Jersey Post would immediately embark upon a radical overhaul of its business as it faces losing its most profitable customers from the fulfilment industry.

Staff members were told that the company faced insolvency within two and a half years unless it carried out radical surgery.

So, to fuel tax abuse in the UK the local people of Jersey are to lose their postal service.

This is the madness of states captured by the financial services sector.

This is the madness of deregulation.

This is the abuse of ordinary people caused by big business determined to tax avoid.

It is this madness which is breaking down the structures of society.

And this is why it has to be stopped.