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09/11/2011
Gov To Close Channel Isles VAT Dodge
The Government has announced that a VAT loophole used by mail order retailers operating in the Channel Islands will be closed from April next year.
The Low Value Consignment Relief (LVCR), which was used by online merchants such as Play.com to undercut its competitors, will no longer apply to goods sent to the UK from the Channel Islands.
The Government said the reform would bring increased fairness for UK businesses, benefit the UK economy and protect millions of pounds in tax revenue.
At Budget 2011, the Chancellor announced it would end the exploitation of LVCR, which in recent years has been used on an increasingly large scale to sell low value goods to UK customers VAT-free.
The Government said it had taken an initial step of reducing the LVCR threshold, below which items are imported free of VAT, from £18 to £15. The new threshold came into effect on 1 November this year and will apply to goods from the Channel Islands until 1 April next year.
David Gauke, Exchequer Secretary to the Treasury, said: ”These reforms will ensure that UK companies, especially small and medium sized enterprises, can compete on a level playing field with those larger companies with the resources to set up operations in the Channel Islands. We are also protecting a significant amount of tax revenue.
"By making these changes, we are striking the best possible balance between the costs of collecting small amounts of VAT and protecting the interests of UK taxpayers and businesses.”
(DW)
The Low Value Consignment Relief (LVCR), which was used by online merchants such as Play.com to undercut its competitors, will no longer apply to goods sent to the UK from the Channel Islands.
The Government said the reform would bring increased fairness for UK businesses, benefit the UK economy and protect millions of pounds in tax revenue.
At Budget 2011, the Chancellor announced it would end the exploitation of LVCR, which in recent years has been used on an increasingly large scale to sell low value goods to UK customers VAT-free.
The Government said it had taken an initial step of reducing the LVCR threshold, below which items are imported free of VAT, from £18 to £15. The new threshold came into effect on 1 November this year and will apply to goods from the Channel Islands until 1 April next year.
David Gauke, Exchequer Secretary to the Treasury, said: ”These reforms will ensure that UK companies, especially small and medium sized enterprises, can compete on a level playing field with those larger companies with the resources to set up operations in the Channel Islands. We are also protecting a significant amount of tax revenue.
"By making these changes, we are striking the best possible balance between the costs of collecting small amounts of VAT and protecting the interests of UK taxpayers and businesses.”
(DW)
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Northern Ireland WeatherThis Evening and Tonight:A fine end to the day with some evening sunshine. It remains mainly dry overnight with a touch of frost or fog patches possible in places. However, cloud is expected to increase towards dawn with the odd light shower. Minimum temperature 2 °C.
