The UK government has announced plans to stop retailers avoiding paying VAT on low value goods – like CDs and DVDs – by procuring such goods from the Channel Islands.
This oversight has been used more frequently by online retailers selling CDs and DVD. The loophole was costing the government £140 million a year.
Low Value Consignment Relief (LVCR) will no longer, from 1st April 2012, apply to goods sent from the Channel Island to the UK.
This measure was set up for tax exemption purposes for goods coming from outside the European Union so that they could avoid paying small amounts of tax – collecting the tax due on such items would have cost more than the revenue raised.
Kevin Flood, CEO of Shopow (the first Social shopping search engine in the UK and is powered by the impartial reviews and experiences of users) says: ‘There has been an unprecedented movement of demand from consumers for cheap goods such as CD’s and DVDs online, fuelled by the downturn in the economy and lagging disposable income. The closing of the VAT loophole could force British consumers to look further afield for cheap deals.
‘The closing of the VAT loop hole is good news for traditional British high street retailers such as HMV and Waterstones, who have come under fierce pressure from Channel Island registered online retailers, whose sales models have been taking advantage of the loophole in the VAT rules to offer cut price goods to British consumers.
‘The situation is not at all good however for the run of the mill British consumer, who will quite literally pay the price.’
I’m sure I speak for all of us in expressing my sincere sympathy to Tesco and the other poor people of the Channel Islands simply trying to scratch a living in hard times.
The very idea that our avaricious and grasping tax authorities would seek to exploit such vulnerable people simply to line the government’s pockets is utterly disgusting.
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