Move to stop ‘VAT cheats’
Friday 25th June 2010, 3:00PM BST.
Deputy Mike Higgins.
COMPANIES that rip off customers by charging UK VAT or excess freight costs could get punished by the taxman.
Deputy Mike Higgins has tabled a proposal to launch a Trading Standards investigation into pricing, because he says that some companies are artificially increasing their prices.
The Deputy wants to use the tax system to penalise the companies that are taking advantage of customers, by forcing them to pay more if they get caught out.
He says that the Economic Development department should retain an accountant – or employ an accountancy firm on an ad-hoc basis – to investigate pricing complaints and to monitor prices generally.
• See Friday’s JEP for full story.
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Sounds good! Half the shops in St Helier will be fined!
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Great! Start with M&S!!!
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As I’ve said many times, there is no such thing as VAT in Jersey so how can they charge it. They are pricing their goods to make a profit. Its up to the shopper to look around to buy cheaper if they can.
I would like to ask Deputy Higgins one question.
Who is to say what a reasonable profit margin is?
Certainly not The States Of Jersey.
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They are not charging VAT, they are just charging higher prices. If you not like the local price buy else where!
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“COMPANIES that rip off customers by charging UK VAT or excess freight costs could get punished by the taxman”.
Blimey that’s going to be a long list, erm all Jersey traders in fact.
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Surely companies who pricing shows VAT on the docket when you buy at item can be charged for fraud by saying that VAT is charged, when in fact it is not remitted.
I wonder if NEXT actually pays VAT charged in Jersey to the UK or pocket it?
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Deputy Higgins appears to be another of those politicians whom reality has bye passed. As a soapbox election speech this is great stuff and but as a politician I would have expected him to think through such a proposition before going public.
For example
Has he consulted Deputy hill to ask if such State interference is Human rights compliant?
Has he consulted his fellow progressives who blame such red tape for our high prices?
How much would it cost businesses to document the price structure of every item?
How many Civil servants and at what cost would be required to monitor this process?
Who would decide what constituted an acceptable business cost?
In effect what is being proposed is the failed Communist policy whereby the State will fix the price of each item.
If Deputy Higgins wants to do something useful about prices then may I suggest that he starts by examining the actual facts rather than shop assistant gossip. Local retailers are unable to take advantage of the salesman’s “special discounts” or factory gate offers available to any UK retailer with a white van. Transport costs are compounded by customs red tape, warehouse costs and addition administrations and handling fees at both sides of the Channel. High property rents for both retail premises and storage, higher salaries, limited market and bulk buying abilities are as much to blame as profiteering.
We need less state interference – not more.
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Companies will set their prices according to what the market will bear and what customers can pay. There has actually been deflation in terms of clothing.
The big issue is the chain stores such as Next. If they can charge one price in stores across the UK then they should be charging the same price in Jersey – even if they added 5% for freight (it costs large companies no more than that) it would be preferable to 20%
Perhaps someone should organise a “Ban Next week” where we all don’t go in the shop for a week – that would make them take notice
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Presumably they’ll be starting their crackdown on the Tax Dept who charge GST on shipping costs when you import goods?!
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lets not employ any more , civil servants, we cannot afford what we have now .
let those who overcharge , be named and shamed, then the taxpayer can vote with his or her feet.
or is the talk of cut backs , just hot air.
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And will M&S prices be changed because of this investigation?. I doubt it.
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So that will be M&S then, safeway, checkers, co op…..thats just for starters.
Are we not supposed to have VAT taken off everything? So all the shops that are charging the same ticket price as it is in the uk is false charging us then….
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@2
Well said!
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I have wrote about this to everyone including M&S 5 years ago and M&S never replied. They are making a killing with the 17.5%$ and also the added on 5% for so called travel costs as well this makes 22.5% and this does not include the 3%GST which they also add on. Glad these companies will be named and shamed it is a long time coming
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Perhaps Island traders could retain an accountant to monitor the politicians who overcharge us for their shoddy goods.
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Fine them-as if they care,most will take their chances——-regardless.
Do you thinktanks not realise that visitors came here for the DUTY_FREE goods IE jewellery perfumes etc and now get better deals at home???
We are being taken for complete eejigs by these shops,no wonder most of us shop on-line or buy our goods when away.
Name and shame them for a start,let the buyer beware and maybe then we will think twice buy local!
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Surely the States are not about to declare war on the BIG corporates (or should I say the people hiding behind these corporates, that run our Island.
HOORAY, HOORAY, HOORAY!!!!!!!!!!!!!!!!!!!!
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just vote with your feet and fingers , don’t even walk into a shop where you know they hide the fact they charge VAT B and Q is possibly only the only local store where VAT is removed unless you know different, and as for fingers if you have access to a PC check prices via the Internet and buy online, until these greedy retailers get the message .
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Don’t forget Next, they will even tell you to your face they charge VAT!
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Would it not be simpler for all those who say they can do better to club together and show the rest how it is done. After all if you are right about prices you would have the entire Island queing outside your store at 8am Monday morning.
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Boots is another shop that removes VAT
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Rip off Jersey i was asked to pay £1.20 for a bottle of water 500ml which i know cost wholesale .07p per 500ml petrol is cheaper and you go further.
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Don’t hold your breath waiting to see any change, this is Jersey remember.
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Was in retail for years, i know exactly what goes on ands its nothing to do with freight. Buy on the net said it time and time again, it,s much cheaper ,don,t have to wait 6 months for delivery either.
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This is a welcome thought but like a lot of things that make the front page and keep people interested it will more than likely never see the light of day. I’m only a blow in but what happened to the legislation that said landlords can only charge cost for electricity and not profit from selling cards?? All the simple bright ideas seem to die a death over here between the thought process and actaulyt making a difference to people’s lives.
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Great but why has it taken all these years for someone to now finally take some action?For many months VAT went down to 15% and here in the UK M & S were deducting this difference at the till point when you made a purchase but when I visited Jersey and enquired if they were doing the same they weren’t even doing that-surprise surprise!
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the ones who play fair are WH Smith, Boots and HMV…
the ones ( or some of them) are NEXT (whose Gatwick store is cheaper than Jersey ie VAT is removed & therefore your gift vouchers go a longer way!!) & Burtons
And yet again M & S tho this is probably Sandpipers cut in the franchise deal…..
Woolies were great weren’t they? cheap & no UK prices… so name & shame the greedy shops!!
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To clarify…its not wrong for them to advertise what ever price they want to charge for their goods. So shop around, use your feet.
But if the retailer states you are paying UK+VAT then he is breaking UK law. If the retailer is UK registered you can report them to HMRC direct. If a UK company leaves a ticket on an item and this states (Inc VAT) then they are breaking UK law. Why? because they are then charging you VAT and then not paying the VAT man in the UK…Fraud.
Because the UK retailer will declare in his accounts that the earnings from Jersey are not VAT inclusive he will not not pay VAT. Also they would be shipping the goods VAT exempt.
This has been an issue in Jersey for many many years and it will not go away until Jersey introduces new laws to stop this happening.
Yes Retailers do have much higher costs then the UK and need to add a % higher, but not the 25% in food that is a daily requirement by rich and POOR.
Any States member who challenges this has my support.
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I hope this proposal includes new car dealerships.
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Maybe a one day strike on a Saturday, no one buys anything, hitting these retailers where it really hurts and sending a clear message that we don’t want to pay VAT or extortionate freight costs.
It worked for the teachers, they got what they wanted!
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I would like something done with the cost of sim free phones. Iphone 3gs 16gig cheapest in Jersey £625 or £379 off a local companies mail order site, less than 24 hours to deliver too.
netbook on launch day £350 in town or £210 on amazon
printer ink cartridge in town £11 on play £6
Hard drive in town £190 on amazon £102
Camera in a closing down sale at an island camera shop £350, off the net at a grand price of £300
I know that shipping to the island is more than it would be for shipping to the island but there is no way that the shipping is that much more to justify the huge price hikes.
Its been a long long time since i have bought in a jersey shop not just the prices but the knowledge of the product being sold by the staff never compares to the feedback from shoppers on the site, also most of the stuff i order takes 24 to 48 hours to deliver so its not like a hugh wait.
think twice buy local, think smart by online
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samuel oneill said:
‘Rip off Jersey i was asked to pay £1.20 for a bottle of water 500ml which i know cost wholesale .07p per 500ml petrol is cheaper and you go further.’
And champagne is more expensive than the water.
Here in lies the real debate – is the mark-up commesurate to the cost, brand, taste, experience etc?
Has nothing to do with whether VAT is applied or not.
It is to do with are our traders making unfair profits or are they simply passing on the additional costs that they incur and we should pay due to the nature of us living on an island?
Yet another Senator taking up air time on a something that gets headlines but will be impossible to control.
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I remember, not so long ago, a certain now ex-politician (his legacy lives on at La Collette!) saying on the radio that he was absolutely disgusted.. Why?.. because booksellers were buying books and putting a margin on them for profit and then complaining that the States wanted to put a tax on that as well.
Obviously the vein of politicians with no understanding of even simple economics continues!
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Sorry I should also like to ask him if ‘My Island Home’ is appropriate and should the States spend a few hours debating that as well.
‘The public get the government they deserve’.. weep!
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This is more hot air.
Shops are closing down. Retail has had it. Other than food, it is impossible to turn a profit because of reduced tourist numbers and t’internet.
Tell them to cut their prices. But with charity shops and 99p stores all over the place, do you really think any shops are making excessive profits?
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PJ
“Maybe a one day strike on a Saturday, no one buys anything, hitting these retailers where it really hurts..”
It would very probably have worked if as many people as possible had spent the first few days of Marks and Spencer’s new regime filling trolleys and then abandoning them at the checkout on being told that there was a special Jersey premium to pay.
It just needs shoppers with a bit of backbone to do it.
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Rozel Aubin #36,
Totally agree with you, many here complain but do nothing about it.
I vote with my feet and go elsewhere, usually the internet, prime example recently, camera in jersey at a large business at the top of Queens road – best price £229.99, Amazon £154.54 without VAT with free delivery in my hands 24 hours later.
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samuel oneill
Postesamuel oneill “Rip off Jersey i was asked to pay £1.20 for a bottle of water 500ml which i know cost wholesale .07p per 500ml”
I’m not sure you’ve got your facts right in this particular case. I have a relative who buys water by the pallet to get the best deal and she would love to know where you can obtain a 500ml bottle of water for that price
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sorry to pour water on the fires of bigotry, but M&S only add 5% to food, most of which is not charged to VAT in the UK. As most of their food is perishable, I think a 5% freight charge is not unreasonable.
And then they discount clothing at the till, taking VAT off but adding a bit for freight and GST. I don’t understand why everyone is having a fit of self-righteousness about it.
Here’s a secret: shops are there to make a profit.
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Donald Pond (comment 39) I agree with your first paragraph however unless M & S in Jersey have changed their policy they have always,to my knowledge,charged the full price on the label ie the VAT inclusive price on clothing.I no longer live in Jersey so if this has changed in recent times then good for them but perhaps someone can confirm this?
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Internet is where the best deals are. Forget shops which need to cover rental costs…
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They all do it !!
For example … a block of ice cream labelled £1.00 is in the UK £1.00 inclusive of VAT …. so how come over here it’s £1.03 ??? VAT and GST !!
Making a greedy greedy profit and cripelling the average Joe Bloggs as always …. no wonder no one apart from the rich can afford to be here !
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Bought a bike for my son online – £75.00 – same bike over here £130.00. No shipping to pay and the company threw in a childs helmet!!
We all know online is cheaper and except for perishables I always comapre online to shop prices. The biggest rip off over here is food. Why do we pay twice as much for Jersey Royals, bread and milk than the UK? Can’t be shipping or VAT…
Two things worry me about Higgins’ proposal:
1. He mentions hiring an accountancy firm or outsourcing to such a firm – WHY when we are trying to downsize our debt – just use some of the states accountants instead.
2. Charge offenders a higher tax – err how? That is just not possible. Should be named and shamed and a large fine imposed say 20% of annual profits.
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The Chamber of Commerce in todays JEP don’t want retailers penalised for not deducting VAT and adding on excessive freight.
Why? Because they know that this is the only legitimate way the shops can charge the prices they need to to cover costs…
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It’s a waste of time and just not possible. We can tackle price fixing and the operation of cartels and the JCRA has the ability to do so.
If (to use Chubber’s example), the bike shop says it only sells 2 bikes a day and so to cover its rent, staff expenses etc it needs to make a profit of £100 on each bike, then people either buy over the internet (and lose the bike shop) or buy local and swallow the cost. I’m not sure what the benefit is of paying accountants to tell them they must sell bikes at a margin that would put them out of business.
Higgins is just a shallow thinking populist. Usually 3 or 4 of them get to be senators.
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#38 I had assumed it must be a typo because 70p would be more like it from a Jersey wholesaler, depending on the brand even £1 wouldn’t be out of the question.
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#35 Brian, I suspect extortionate rents are probably a in the equation also.
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Those criticizing Deputy Higgins…hold your horses I say…there are many shops here who add V.A.T. and have said when challenged ..”Ahh it’s to cover freight…Pahhh However what does affect retail prices more than anything else is the greedy landlords…yes…eg…small shop in Queen st…wanting 92k a year rent.!! before you are switching on a light bulb or employing anyone..the grabbers are responsible….for it is quite hard to make retail pay here these days,but it always comes back to those who want to charge such mad rents.
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We have no one but ourselves to blame for the high prices charged at local stores. They may ask for them, but it’s us who hand over the cash.
Take M&S, the amount of people who say Oh but its lovely food well worth the extra. My backside it is.
I would not touch the overpriced salt / preservative laden muck with a barge poll. Convenience some say, give over, all one needs is sink and a microwave to produce fresh, healthy, tasty food quicker than it takes to park the car..
If you want these rip off shops to survive just keep on using them.
If you want value for money shop elsewhere.
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For long enough Jersey was advertised in brochures as a V.A.T. free island, why were they never prosecuted under the Trade descriptions act?
Legislation should be brought in here as a matter of urgency, a decision should be made as to whether is or is not aganst the law to charge V.A.T.
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Retailers can charge what they like, it’s up to us whether we are prepared to pay what they are asking, so this taxing suggestion is absolute nonsense. Don’t like M&S, go to the Co-op (which means shorter queues for those of us who think M&S is great value).
What I don’t like is those traders and shopkeepers who take our money but don’t ring up the sale on the till. Now why wouldn’t they ring up the till? Maybe because they think that taxes are for the rest of us and not them so why declare all that income?
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I purchased a pair of Jeans in Axle several years ago, yet when I went back to England they had the exact same pair of Jeans in a top department store for £20 less on the price tag & that was including VAT at 17.5%, so in total there was around £37.50 difference. Work that one out……..
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Ok we should all email Mike Higgins, to start with our very own Customs and Excise who charge the 3% GST (soon to be 5% and more) on the postage costs. This is a disgraceful, sort your house out first! Then make these other companies pay corporation Tax, if they choose to keep the VAT on goods. Beware also, PLAY.com do not remove the VAT at checkout! Always avoid shops that charge the VAT locally!
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Many posts on here bitch about getting ripped off and how states members do nothing to protect them…then this guy does and some silly peeps seek to slate him for it…I smell a rat methinks they have other agendas..or else why would they be against saving a non applicable tax.Keep it up Mr Higgins sir..we are a tax free port status as decreed by Charles the 2nd.
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I totally agree with naming and shaming greedy shops. We live in a consumer world and have been “advised” by the COM to tighten our belts. So lets see the data, and vote with our feet.
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Such a difficult area – many of us I assume are not retailers so we are making assumptions about profit margins. I’m thinking high rent costs + high staff costs + limited market + shipping = likely higher prices in Jersey compared to the UK not cheaper. For small individual shops I can see this being a huge problem but for larger retails, ie, NEXT they have a huge operation which surely counteracts this. ie, their shops in central London likely to have much higher rent costs than one on a retail park in Liverpool but they do not charge more for their items in the London store than their Liverpool store. So we are being unfairly overcharged by Next, IMO.
The internet is an attractive option and I hardly buy anything locally unless it is in a sale or an emergency! Will local retailers drop their prices to compete – I doubt it, I’m not sure they can and we will probably lose them and then that will drive down rent if their are no local shops to pay it! Consequently the shops left will be able to charge even higher prices because they will have no competition.
I support Mr Higgins good intentions but the issue is far more complicated that it seems at first glance.
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brian cant (35) This is more hot air
I have to agree with Brian. Price controls went out with the Labour government in 1979.
What we need is an open and flexible market. It is the internet that is thrashing local retail. Firms like B&Q are competing head on and winning, as I am sure Waitrose will do too.
If the Economic Development department are to do anything, they need to smooth the GST payment process at the ports, it is a mess.
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#52 ‘Work that one out……’
Even at the English price, if the VAT was £17.50 they must have been one helluva pair of jeans. No wonder they need a capital “J”.
The tax authorities are on to a good earner with GST/VAT. The rich can cushion themselves, so everybody is happy except the poor and those who find themselves acting as unpaid tax collectors .
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Thank you Mark G at 28. Well said! Glad someone clarified that…. i have been trying to explain that “small!!!” detail for to people for years!
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Regarding VAT, I thought this was not included on food in the UK! Is this correct does anyone know? Anway, I just bought a punnet of strawberries from M&S and it said ‘half-price at £1.99′, but at the till I was charged £2.05, I also thought it was illegal to charge a different price from what is actually on the label of the item you were buying, as this happened to me a long while ago in the UK where they had made a mistake with the pricing, but the manager said that she could only charge me what it said on the label, so I got a good bargin there (I cannot remember what it was though). And as for Next, I saw something nice advertiesed in a Sunday magazine supplement and I thought, oh that will be nice at 17.5% cheaper over here – guess what, it wasn’t any cheaper.
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So .. the cost of living is higher in Jersey than in the UK, that is without question!
Some UK based retailers are selling products in Jersey at the same price as is charged in a low cost area ie the UK that being basic cost plus a local tax called VAT.
How can anyone then rationally argue that pricing goods at this rate (priced for a low cost area) and then selling them at this rate in a high cost area (Jersey) is ‘nasty and heinous’.
People here need ‘Reality Pills’ I’m afraid.If we are more expensive than the UK for cost of living and we are buying product at the same shelf price as they are .. then we are getting let off lightly with this (product+VAT equivalent price) .. to suggest we in a high cost environment should only be paying product+GST and that anything else is ‘too expensive’…is a pathetic position!
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Higgins is just another loony from the left who goes for the populist vote.
They never have any solutions to problems which is why JDA and the like are not credible candidates for the States.
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#60 Teresa, VAT is zero-rated (0%) on most food items, books, newspapers and magazines, children’s clothes and some special items (usually relating to a disability of some sort). Some things (mostly gas and elecriticy) are at a reduced rate of 5%.
The majority of other items (save for things like postage and insurance, which are exempt from VAT) are charged at the full 17.5% These are meant to be non-essential items! Yet, these include adult’s clothing (just as essential as children’s clothing) and sanitary products for women (can you imagine a society without those!) It’s a good system in many ways, except for the items I’ve pointed out, they’re treatment is bizarre and subject to a lot of lobby pressure.
The food VAT issue prompted the “is a Jaffa Cake a cake or a biscuit?” debate. Cakes are subject to 17.5% VAT, biscuits are not. It was agreed (I believe) that overtime biscuits go soggy and cakes go hard.
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#60 Forgot, in the UK it IS illegal to charge something different to what is on the label (even if a genuine mistake has been made). I do not believe this law exists in Jersey, if it does then I have been ripped off many times!
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‘Higgins is just another loony from the left who goes for the populist vote.
Matches up with the loonies from the right with the Jersey national anthem, moving to Central European Time and one hour out of step with the UK and more besides.
Anyone can play the game of spotting the bull goose loony in the cuckoo’s nest, there are plenty to choose from!
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65 Pip Clement.
You missed out a couple of other ‘bleedin’ obvious’ populist bits from that particular stable (as in horses not as in balanced!!).
The Odeon is an ugly building.
Children should do running and jumping.
Thank goodness it’s only the JSPCA collection box in St.Martins public hall that that populist now has responsibility for!
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