March date for court battle over mail order legal challenge

Wednesday 8th February 2012, 1:11PM GMT.

Senator Maclean rejected criticism of the budgeting for the case over Low-Value Consignment Relief

JERSEY’S legal challenge to the UK government’s attempt to shut down the online mail order industry will reach court next month.

Ministers have received confirmation that the challenge will be heard before the UK proposes to bring down the axe on 1 April.

With up to 2,000 jobs hanging in the balance over the uncertain future of the online mail order industry, there will be anxious eyes on the progress of the case.

The UK coalition government plans to shut off the Channel Islands’ access to Low-Value Consignment Relief – the £15 threshold for charging VAT on goods entering the UK from outside the EU.

Currently, Channel Islands firms can export goods, such as CDs and DVDs, priced below £15 VAT-free, but last year UK Chancellor George Osbourne said he would shut off the islands’ access to LVCR after years of campaigning by UK retailers, who say that they are being undercut.

Economic Development Minister Alan Maclean said that they had secured agreement to have the case heard early – a significant step because if the change is made on 1 April, jobs could be lost almost immediately. He also confirmed that lawyers from PwC had been retained for the case.

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1
Sam

February 8, 2012 at 2:02 pm

Isn’t it ironic that we shop online with UK retailers such as Amazon because it is cheaper that buying local. Same arguement the UK are using. Put it simply high street retailers need to be competitive to secure our trade.

Also has anyone considered it is not just the fulfilment industry. How many islands clear out unwanted items by selling them on eBay? These items will be caught up in this too.

I asked for advice in the Post Office as I do sell unwanted items on eBay and the advice was to mark it as a gift! This is illegal.

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2
chris

February 8, 2012 at 4:39 pm

Hi Sam

Second hand items aren’t eligibale for VAT so I dont think you should have a problem?

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3
capitolist

February 8, 2012 at 7:19 pm

Like the Falkland islands picking on Argentina….time Jersey kept its gob shut before they make things worse for themselves…and embarrasing themselves too.

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4
Sam

February 8, 2012 at 7:50 pm

Chris that may be the case but there is no way of saying that on the current customs form.

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- Pip Clement
  
  February 8, 2012 at 9:25 pm
  
  Mark it’s value as a few pounds then.
  Unless it is really valuable and there is a second hand market in the item that customs can refer to they are going to have a tough job.
  
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5
Mario

February 8, 2012 at 8:26 pm

They got £5M from Jersey post 1982 to build some houses. This alerted the UK government to the fact that Jersey was rich and that it could make a contribution to defence and the TA was reborn…Guernsey kept a lower profile.

As for fulfillment can anyone see the UK government backing down? I blame the states for allowing this sector to materialise they must have known it was likely to only be short term before the UK got fed up and shut it down. It has caused the loss of thousands of jobs in the UK.

When allied to bank job loses locally, which I predict will increase in frequency over the coming year, this has the makings of a perfect economic storm for Jersey. And this is without any major fallout from the EU. Yes the future is rosey….isn’t it!!!!!!!!!!!!!

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6
sporran

February 9, 2012 at 6:48 am

The challenge on the grounds that it it discriminatory, if sucessful, could unleash a review in the UK to ensure that channel islanders are treated exactly the same as other non-uk residents.

This could have many undesireable consequences eg. an end to health agreements, students paying full overseas fees, no right for anyone with ‘the stamp’ on a Jersey passport to work in the UK etc.

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7
Zoro

February 9, 2012 at 2:51 pm

Taxpayers of the island ..brace yourselves for this is going to feel akin to standing naked in a freezing cold shower tearing up bundles and bundles £50 pound notes,and throwing the bits away.

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8
gone phishing

February 9, 2012 at 5:54 pm

take a look at this…..
http://www.guardian.co.uk/business/2005/jun/28/buyingmusic.supermarkets?INTCMP=ILCNETTXT3487

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9
Carl

February 9, 2012 at 8:36 pm

A lot is said about the workers in Jersey losing their jobs but very little is said about the thousands of struggling UK businesses who have to pay 16.6% more tax than their competitors.

The internet allows instant price comparison across a wide range of retailers. The only thing stopping my business matching price with the likes of Play or Amazon is that they don’t pay VAT and I do. These companies already have distinctive tax advances (Amazon being based in Luxembourg as an example) and the small trader is dying.

The Channel Islands do make a good point though, they are being discriminated against, VAT should be applied to all mail order goods entering the UK and that is the way it will head as the current situation is a violation of the EU VAT directive and as a member state our government is obligated to adhere.

Jerey’s ministers should approach the EU courts if they have issue with EU laws.

I’m counting the days until this loophole is closed and if the Jersey or Guernsey manage to make an advantage with their court proceedings there will be thousands of small UK businesses ready to fight back again in order to protect their livelihoods.

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10
joy

February 12, 2012 at 2:52 am

i shop with play.com for a reason.in great yarmouth there is not a proper cd shop.there is no hmv.i would have to travel 20 miles to find 1.i dont just buy cds i buy dvds.computer ware ,camcorder things and books.if you were to go to great yarmouth in norfolk you would find £ shops and loads of charity shops.since woolworth went and by the way all my cds and dvds used to be bought from there.shops have gone co op large store gone,half the space in w.h smith is now a post office.we only have 2 shoe shops and no reasonable priced clothes shops.this is not because people are buying online its because rates are too high.this used to be a lovely town for shops.v.a.t.prices are outrageious.i bought 2 cds for £10 in hmv jersey last may ,did not play them till i went to belfast.if i had bought them seperately in jersey they were priced £7.99 each.i had to take 1 back to belfast hmv because it had a disc missing,they replaced it with same cd gave me a reciept marked £13.99. at time our vat was 17 and a half percent,£1.36.where did £13.99.come from.

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11
Carl

February 13, 2012 at 12:52 pm

In answer to where did £13.99 come from, the extra cost is to cover staff, rent, business rates, electricity, shrinkage (damaged/stolen stock), my local HMV usually has a security guard at the door on busy days who is paid a wage and god forbid make a bit of profit out of the sale.

Online businesses who don’t have these massive overheads can cut the end price. Supermarkets can do cheap goods but this is because of their buying power and because on say DVDs/CDs, they’ll sell at break-even or a loss as they know most will do some grocery shopping whilst picking up a DVD.

The only reason your local shops have gone is because they were not supported. Your comment about where did £13.99 come from is the reason they are not supported. Brand loyalty has diminished over the years and consumers are picking the cheapest whilst thinking real shops are expensive without consideration for the true cost of running the shop.

Similarly you can ask where your local butcher, baker, dry cleaner, pharmacist and green grocer have gone to and the answer is the number of people walking around the supermarkets.

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