CD trading VAT loophole to close
A VAT loophole that allowed Guernsey and Jersey-based traders to avoid VAT is to be closed by the government.
Under the Low Value Consignment Relief, companies selling goods such as DVDs, contact lenses and CDs through the Channel Islands were able to avoid paying VAT on such goods. The Channel Islands took the Treasury to a judicial review over the matter and lost their case last week.
The loophole was used by retail heavyweights including Amazon and Tesco to avoid paying VAT on such goods and led to the closure of numerous British businesses unable to compete on the margins available to those operating in the Channel Islands. In 2010 The Guardian carried out an investigation into the topic.
Ruth Corkin of accountants James Cowper remarked that 'From the 1st April thousands of items valued under £15 will carry VAT' adding that as a result prices are expected to rise of such goods.
Further information from Taxguide.co.uk on VAT rules when importing and exporting is available here.