MP says islands are misleading UK

Saturday 31st January 2009, 10:00AM GMT.

THE UK government must act to stop Channel Islands fulfilment companies costing the UK Treasury millions of pounds in lost tax revenue, according to a Labour MP.

The MP for Burton, Janet Dean, has accused the islands’ authorities of misleading the UK Treasury over fulfilment – sending out packages of goods ordered over the internet without charging VAT.

She says that the European Commission has begun a formal investigation into the situation, and that companies selling mail-order CDs, DVDs, health food and health supplements through the Channel Islands were costing UK firms money.

‘I am left wondering what possible justification there can be for giving a huge exemption from value added tax to those products,’ said Mrs Dean during an adjournment debate on Low-Value Consignment relief on Tuesday.

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1
Pescatarian

January 31, 2009 at 5:01 pm

The limit on VAT exemptions was set by the UK government as it would cost them more than the VAT to collect it on low value imports. They can change their rules but it would not benefit them.

The MP makes the usual false assumption that people in the UK would then buy those goods at UK prices. Everyone has a limit to what they are prepared to spend on certain goods. That means that cutting off supplies of imports would not always lead to increased sales in the the UK. It would probably lead to lower sales and losses for UK companies as well as those here.

Just another example of the politics of envy.

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2
Mike R

February 2, 2009 at 1:34 pm

Yes – and of course the classic outcome of the UK trying to prevent the Channel Islands from undertaking business is that they will simply drive that business to other, less reputable locations.

Most of what Jersey supplies to the UK is sourced from the UK – whereas if other non-EU countries filled this void they would not source goods from the UK.

Interestingly in order to shut down LVCR they need to take EU action – closing it to all jurisdictions. Consequently the UK – Jersey – EU trade would also cease.

UK MPs are always short sighted about this – thankfully the UK Government actually undertakes some analysis and doesn’t cut off its nose.

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3
david brown

February 2, 2009 at 2:43 pm

get off our backs, we need this industry.
it is a job that almost anybody can do.
my message to the uk “get your own house in order”

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4
James Deale

February 5, 2009 at 1:40 am

Pescatarian – With regret, Jersey will eventually be pressured by other means to ensure VAT is charged on these items should the UK insist.

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