Treasury to close loophole that allows VAT-free DVDs

Rameses

Rameses

Rameses

Soldato
Joined
18 Oct 2002
Posts
8,453
The government is to change the tax rules that have allowed retailers to avoid paying VAT by sending goods from the Channel Islands.

Low Value Consignment Relief (LVCR) will not apply to goods sent from the Channel Islands to the UK from 1 April.

The loophole has been used increasingly in recent years by companies selling CDs and DVDs online, such as Play.com, Tesco and Amazon.

The government said the loophole was now costing £140m a year.
Click to expand...

http://www.bbc.co.uk/news/business-15646470

What will it really mean to the companies on the island, and prices in general? Will it be no cheaper for a CD/DVD than any where else on the mainland after April 1st?

Anyone agree that closing the loophole is a good idea?
 
So companies are basically just evading tax to up profits? Which means that if this does come into effect, the prices will go up? By a minuscule amount?

Or am I completely wrong?

Probably put my bet on option b, tired and mildly drunk.
 
Shayper said:
So companies are basically just evading tax to up profits? Which means that if this does come into effect, the prices will go up? By a minuscule amount?

Or am I completely wrong?

Probably put my bet on option b, tired and mildly drunk.
Click to expand...

That's what I don't understand, in the old days they were much cheaper but now-a-days I don't see it, so as you say, are they selling at 'normal' prices while gaining the extra profit from tax evading and thus when its closed they'll become like any other online / high street priced retailer!
 
Tax avoidance, not evasion. using the loophole is entirely legal.

closing it off makes sense to me, tax avoidance is mainly driven by unnecessarily complicated tax and relief systems.
 
There is a reason Play.com sold up shop to Japan.

We will be hit pretty hard locally, likely job losses as companies wind up/move elsewhere (As in Play.com)

Generated a fair amount of income for the island.

It does make me smile though, how your UK franchises sell locally at the VAT price. We do not pay VAT but yet our prices are identical to yours. Nice.
 
Last edited:
I stopped ordering from a certain Channel islands online shop ages ago because of their increasing delivery times. I haven't really been paying any more for items from UK based companies.
 
ElliorR said:
I stopped ordering from a certain Channel islands online shop ages ago because of their increasing delivery times.
Click to expand...

Likewise. Haven't ordered from them for years for the same reason. The last thing I ordered was, I think, Operation Flashpoint 2 (yeah I know) and despite it being a pre-order it hadn't arrived 2 days after the retail game launch. When it eventually pitched up it went straight back for a refund, as I'd ordered from the river store for the same price and it had been delivered the next day.

Don't think I ever will again now I can get next day delivery from the river store via their prime service.
 
AmTechFox said:
http://www.bbc.co.uk/news/business-15646470

What will it really mean to the companies on the island, and prices in general? Will it be no cheaper for a CD/DVD than any where else on the mainland after April 1st?

Anyone agree that closing the loophole is a good idea?
Click to expand...

Yes I am delighted. It's great for small business owners and hopefully will help music/dvd shops in the UK, particularly independents. :)
 
Non existent these days, play.com boomed when DVDs become popular, you can pick up dvds in supermarkets for £2-3

New releases are as cheap in shops as they are online.
 
I’ve found myself in the last few years just buying from the local Fopp in Manchester.

Despatch times from the jungle store seem to have increased with some cd’s often being 2 days after ordering before I even get the out for delivery email. Probably pay an extra 1 or 2 quid per cd but I’m an impatient git!
 
I work for one of the companies mentioned in the OP. And the companies named are by no means the full list. Pretty much ever serious media retailer dose it now. What will it mean?

Ultimately the warehouses on the island will close. But the companies aren't really "based" there, they just ship from there. Other things be equal it doesn't really make much difference in terms of competitiveness.

There is little to no money to be made from CD, DVD, Games already so one of two things will happen. People will stop selling these products or the price will go up considerably. I'll leave you to work out which one.

Deliveries will become quicker and cheaper. The cheaper shipping will in some part make up for having to pay the VAT. Selling from Jersey is beneficial, but not a beneficial as some people like to make out.
Marvt74 said:
I’ve found myself in the last few years just buying from the local Fopp in Manchester.

Despatch times from the jungle store seem to have increased with some cd’s often being 2 days after ordering before I even get the out for delivery email. Probably pay an extra 1 or 2 quid per cd but I’m an impatient git!
Click to expand...
That's because they ship from Jersey and Jersey post is slow.
 
Last edited:
I think it probably makes sense to change this.

While Play is the most well known operator, there are plenty of others. Amazon and Tesco are the other two big players and they only have operations there in order to increase their profits.

I think the people it will hurt most are those on the island who are employed in such warehouses, as I would imagine that will all dry up now.
 
You must log in or register to reply here.
Back
Top Bottom