Treasury to close loophole that allows VAT-free DVDs

Glaucus · 9 Nov 2011 at 17:17

DanielMMS said:
The Channel Islands are not part of the UK. Up until now, HMRC have basically ignored all DVD sized packages coming in from the Channel Islands. Abolishing LVCR will require HMRC to examine each and every one to ensure that the relevant duty etc is paid. That will be manual and hugely time consuming. Then there will be the need for all offshore suppliers to be registered with HMRC, send in returns etc.

It's no different from high value goods and these companies must already pay it. Isnt t it only for goods under £18 and that's being cut to £15?
So no they are already registered and it's already set up. It won't be manual. It'll be x-% checked with punishments I would have thought. They don't hand check ever high value good, do they.

DanielMMS · 9 Nov 2011 at 17:17

Glaucus said:
But will they, companies don't seem to want to go far, probably due to shipping costs and shipping time. So I don't think we will see these companies move even further abroad.

Difficult to say on the whole but Play (having been sold recently) are about to move their warehouses elsewhere. Amazon can move to any one of many jurisdictions they already use. HMV, Tesco likewise. Woolworths, who knows/cares!

md85 · 9 Nov 2011 at 17:18

This won't do diddly squat for the 'UK' economy. They'll just up shop and move to Switzerland and nothing will change. All this is doing is losing 2000 warehouse workers their jobs, destroying a number of Channel Island courier and delivery companies and probably putting a number of developers, designers, marketers and 'support/help desk' staff out of a job as well (when said companies decide to move their offices to cheaper rent, cheaper waged places).

PermaChanged · 9 Nov 2011 at 17:26

There will most likely be huge job losses for Guernsey, there are a lot of "fullfillment" jobs over here, the main one being HMV.

I can only assume the fullfillment companies in Guernsey will leave as there will no longer be a benefit to them being here tax wise, add to that the higher cost of living in Guernsey which relates to a higher wage for employees and it's a no brainer.

gothic_hobbit · 9 Nov 2011 at 17:33

md85 said:
This won't do diddly squat for the 'UK' economy. They'll just up shop and move to Switzerland and nothing will change. All this is doing is losing 2000 warehouse workers their jobs, destroying a number of Channel Island courier and delivery companies and probably putting a number of developers, designers, marketers and 'support/help desk' staff out of a job as well (when said companies decide to move their offices to cheaper rent, cheaper waged places).

I recall playusa.com having a warehouse in Belgium that stocked region 1 DVD's.

Perhaps the new play will move there.

SeraphX · 9 Nov 2011 at 17:36

The Treasury are ***** already, they can't manage the money they currently 'have', they certainly shouldn't be allowed anymore!

Dj_Jestar · 9 Nov 2011 at 18:19

md85 said:
This won't do diddly squat for the 'UK' economy. They'll just up shop and move to Switzerland and nothing will change. All this is doing is losing 2000 warehouse workers their jobs, destroying a number of Channel Island courier and delivery companies and probably putting a number of developers, designers, marketers and 'support/help desk' staff out of a job as well (when said companies decide to move their offices to cheaper rent, cheaper waged places).

They have to pay VAT/Duty if shipped from outside of UK, so everything you've said thereafter is just.. meh.

Why is this so hard for many to grasp? There was relief for those companies based on the channel islands. Large multi-nationals abused this to avoid paying VAT and increase profits.

Sin_Chase · 9 Nov 2011 at 18:42

Dj_Jestar said:
Why is this so hard for many to grasp? There was relief for those companies based on the channel islands. Large multi-nationals abused this to avoid paying VAT and increase profits.

They made more profit, you saved on purchases also. People did not buy from them for the luls - It's because it was cheaper.

Everyone loses and the Government sorts out £140Million 'worth' of cash they never had and never will. Some other whinging retailers who did not capitalise can feel good and continue to charge in-line with everyone else.

Danthus · 9 Nov 2011 at 18:56

Dolph said:
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.

What?

md85 · 9 Nov 2011 at 19:04

Dj_Jestar said:
They have to pay VAT/Duty if shipped from outside of UK, so everything you've said thereafter is just.. meh.

Why is this so hard for many to grasp? There was relief for those companies based on the channel islands. Large multi-nationals abused this to avoid paying VAT and increase profits.

Another clueless, hypocritical Englishman. Happy to use those companies to your advantage, until it starts hitting your high streets.

Maybe your government should start looking at all the UK companies harbouring their money in places like Jersey and the Cayman and force them to pay their taxes properly. But wait, they'll just move their business elsewhere - best destroy someone else's economy first and keep the rich English richer.

Dave M · 9 Nov 2011 at 19:05

Sin_Chase said:
Everyone loses and the Government sorts out £140Million 'worth' of cash they never had and never will.

Why will they never have any of this tax revenue?

Sin_Chase · 9 Nov 2011 at 19:08

Telescopi said:
Why will they never have any of this tax revenue?

Because it's gone and closing the loophole will not do anything to recover it.

Glaucus · 9 Nov 2011 at 19:12

md85 said:
Another clueless, hypocritical Englishman. Happy to use those companies to your advantage, until it starts hitting your high streets.

.

I'm happy to use such services as I don't think they need to be on the high street.
The high street to me is pretty pointless with current shops.
I want local/handcrafted/specialised shops on the high street. Not electrical stores that all stock the same and can be found cheaper on line.

Give me farm shops, bespoke/small furniture shops, specialised shops like home brew. That short of thing.

High streets have a lot to answer for. I mean where I used to live, they always complained people didn't shop there. I wonder why. Is it because they all shut at 5 and no parking. Where places like cribs are open when people aren't at work and not only have plenty of parking but it's free.
Also filled with **** shops.

Dave M · 9 Nov 2011 at 19:15

Sin_Chase said:
Because it's gone and closing the loophole will not do anything to recover it.

Oh, I see, what about future revenues? Have to close it sometime.

Dolph · 9 Nov 2011 at 19:16

OldCoals said:
What?

The more ways to classify money/income and so on, the more routes to tax avoidance there are.

Biohazard · 9 Nov 2011 at 19:18

Dolph said:
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.

Doesn't it match the fiscal jurisdictions within the UK? It isn't very fair shouting "complicated tax system" when it actually has nothing more to do with complexity than reflecting real life borders?

Biohazard · 9 Nov 2011 at 19:19

Dolph said:
The more ways to classify money/income and so on, the more routes to tax avoidance there are.

Everything, everyone and every place is not the same however.

md85 · 9 Nov 2011 at 19:19

Glaucus said:
I'm happy to use such services as I don't think they need to be on the high street.
The high street to me is pretty pointless with current shops.
I want local/handcrafted/specialised shops on the high street. Not electrical stores that all stock the same and can be found cheaper on line.

Give me farm shops, bespoke/small furniture shops, specialised shops like home brew. That short of thing.

I agree, by high streets I probably meant UK based companies providing the same thing, whether it's online or shops.

My point was that most of the people celebrating this are the same people that used it for years without a care in the world for the 'tax' their government was losing. Most of them actually think this is going to make a blind bit of difference, half of these companies have already left the Channel Islands or are in the process of leaving. They'll simply find somewhere else to go with similar or low tax thresholds and nothing much will change. Half of the companies that do exist on the high street (and I include shops like Waitrose in that) are more than happy to come to Jersey high streets, ignore our lack of VAT and charge us the same or higher prices than they do you anyway, then complain about the business they lose through LVCR.

Additionally, where does everyone expect all the Polish and Portuguese workers who fill a large portion of these jobs in the Channel Islands to go? I can tell you they certainly won't be staying here, there are no jobs (and soon to be even less), and I highly doubt they'll head back home. You've just emptied 1000 new immigrants and their 3-4 member families in to your country and on to your benefits system.

Energize · 9 Nov 2011 at 19:19

Play.com were scammers anyway, refusing to accept the return of faulty goods even though they are obliged to by law, would be no great loss to see them go.

Glaucus said:
If they stay hrmc gets money, if they leave hrmc get money. So confused by your statement.

Well reduced employment results in more people on benefits, draining the coffers. It's not great for the economy.

arknor · 9 Nov 2011 at 19:21

Sin_Chase said:
They made more profit, you saved on purchases also. People did not buy from them for the luls - It's because it was cheaper.

Everyone loses and the Government sorts out £140Million 'worth' of cash they never had and never will. Some other whinging retailers who did not capitalise can feel good and continue to charge in-line with everyone else.

how will they? the people who bought from jersey are just going to stop buying products now? dont make me laugh