The sheer absurdity this comment, made a few moments ago on my blog posted earlier today on common arguments supporting the abuse of low value consignment relief, has to be carefully considered. The commentator said:
I am watching this very closely and I am getting to the tipping point of “if you can’t beat them, join them”. If nothing happens, my business based in Isle of Man will be shipping through Jersey in 6 months time. Absolute logistical nonsense.
So here we have an Isle of Man business planning to ship its products to Jersey for onward supply to the UK simply to abuse UK VAT rules. The madness is beyond imagination.
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He won’t. He won’t get a license from Jersey’s Regulation of Undertakings department.
@Richard Murphy
The same kind of “madness” that allows to an Isle of Man registered plc to ship its product into the EU without the required licence and market it using misleading brochures via unqualified and unregistered “introducers”.
Then receive bank transfers from hundreds of pensioners for a product that is patently unsuitable for them whilst paying the “introducers” undisclosed commissions via Caribbean shell companies. Basing the company’s bank where else but Jersey and the Trustees where else but Guernsey.
The PSG could go on …
Rather than “madness” perhaps “anarchy” is more descriptive.
@James
Not many people may believe you?
To quote the guys at vatloophole.com:
In 2007 the Jersey government announced that it would no longer be granting licenses for CD and DVD retailers. Unfortunately by this point the CD and DVD industry was already based almost entirely offshore so rather than curbing the problem it simply reinforced the already strong positions of Jersey based retailers such as Play and Thehut.com. Limiting the licenses for companies within the CD and DVD market only is very much underestimating the scale of a problem as the real growth areas presently are those outside of this one industry. Furthermore it is the volume of goods being sold not the number of retailers that is the problem. Limiting the number of retailers does nothing to prevent the sale of goods VAT free from the Channel Islands and the ongoing abuse of LVCR.
In any case in 2007 Jersey also asked certain UK retailers to cease their operations on the Island. One such retailer was Tesco who kept their offices in Jersey, moved their fulfilment operations to Switzerland briefly and then moved to Guernsey with the help of TheHutGroup.com.
You might also want to look at the Regulation of Undertakings guidelines on fulfilment (section 9 is the relevant part): there could be avenues in, but the basic answer is that to start a new fulfilment business you need to have a Jersey principal, and there is a specific guideline that UK businesses diverting trade through the island are not to be supported. Whether the Manxman could slide past that guideline is open to question.
It’s a long way short of perfect – but it is moving some way in the right direction. A lot more so than Guernsey.
James
Why would he need a licence if he simply teams up with an existing Jersey business?
@James Not according to what I have been told when I looked into it. They are not turning down licences outside of the music industry.
@Richard Allen I had at least three sources in Jersey say to me ‘licence, no problem unless you are selling CDs and DVDs’ They are actively touting for business in other areas.
Or just use someone with a licence….the whole license nonsense is a sham.
Licence to ignore regulation or apply it on the hoof.
But only when convenient.
@Premier Shareholder Group Quite and if any one doesn’t believe me just contact one of these offshore trust companies and they’ll explain all you need to know.
@James I repeat…you just get a trust company to set it up for you. I was offered a ready to go company with Jersey Directors… Also this ludicrous policy doesn’t stop the ongoing abuse of LVCR. I know a number of companies that have done this. Not only that but under EU law the UK has a number of methods for stopping abuse (stopping abuse is a legal obligation by the way, not an option) . Asking the Channel Islands to set up a funny handshakes club is not one of the options. Its nonsense. So the guy in Manx can’t join the party then ? Who cares which companies benefit. The volume of abusive sales continues UNCHECKED. ITS AN ABUSE!
@ James.
You are wrong. No licensing problems whatsoever. We can go with this any time and have partners in Jersey ready to go. The only thing stopping us is the possibility (hope) of the coalition removing the need to do it. I do not approve of this at all. I see it as a scam but if it is accepted as legal by default what are we to do? Watch competitors go forward with a 20% advantage in a low margin business or jump on board?
@woolley Right on. Only politicians and civil servants would believe this licence nonsense. Meanwhile businessmen fleece the idiots.
Obviously wasn’t a problem for Sainsburys and Best buy getting licences to trdae, was it !
http://www.vatloophole.co.uk/sainsburys-entertainment-set-guernsey/305/
Go for it Woolley! You’ll probably increase sales, and you’ll be giving the UK consumer a better deal. And when the HMRC finally does get around to closing the loophole, you’ll hopefully retain your new clients alongside your old ones.
I can appreciate you feel it’s a scam, but why should your business suffer due to the HMRC’s incompetence?
@Greg Yes great idea unless it closes a week later…. As for morals..what are they. Who needs ’em.
And how much use are morals when your business is bust and you’ve got a family to feed and a mortgage to pay?
I have sympathy for your plight, but what do you suggest Woolley does?
Do you know how expensive it is to set up offshore ?
Are you reading this HMRC/Treasury Officials ? Can you see what ludicrous decisions people are having to make because of your total incompetence ? (they read it you know…)
If anyone want’s to join in call this company. They are more than happy to help. Apparently with VAT going up to 20% now is the time to get on board and enjoy the benefits.
http://www.rkgconsulting.com/e-commerceinternet-retail/
You couldn’t make this up if you tried. Its like watching a slow motion car crash….