Home » VAT » Channel Island’s VAT Dodgers in Denial whilst UK and EU Prepare Measures to end LVCR Trade.

Channel Island’s VAT Dodgers in Denial whilst UK and EU Prepare Measures to end LVCR Trade.

Despite George Osborne’s budget announcement that using LVCR to gain a VAT advantage in the UK is an abuse of European Tax legislation many Channel Island based LVCR abusing retailers and the infrastructure that supports them appear to be carrying on as if nothing has happened, apparantly assuming that the reduction in LVCR to £15 is the only measure that will be introduced by the UK Government. According to The Guardian online retailer and fulfilment company The Hut are even considering floating on the stock exchange.

All we can say at RAVAS to those currently enjoying the benefits of VAT free mail order  is that we have been informed by both the European Commission and the UK Government that changes will definitely be introduced to prevent this practice completely. You have been warned.

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12 Responses to Channel Island’s VAT Dodgers in Denial whilst UK and EU Prepare Measures to end LVCR Trade.

  1. Well I certainly won’t be buying shares in The Hut too rapidly.

  2. Hedge funds are your best bet here, you make money on the back of falling shares.

  3. But introduced when? 2025? Retailers need this loophole closing now, before Christmas 2011.

    • In the scheme of things taking 12 months to close this down compared to the 28 years its been going on would not seem unreasonable, but we remain sceptical until its actually done.

  4. Channel islands VAT Dodgers?!! So let me ask you all, do you ensure that in your business you make use of every possible tax relief you can use to ensure you pay the littlest amount of tax you can? Yes I’m sure you do! So….us vat dodgers over here are yes continuing on with our business as we should do not because we are continuing to rape the uk of vat but because we can! If and when lvcr is stopped we will also continue with our business our prices will rise and we will pay over the vat, as we are obliged to! At the moment under lvcr rules we are not obliged to, this doesn’t mean we should shut up shop! We will simply continue business and the consumer will cover the vat costs. I suggest people start looking more at how to run a successful business rather that pointing fingers elsewhere to blame for their failures!

    • You suggest that circular shipping goods to avoid VAT is a legitimate tax relief, but it’s never been that as clarified by both the UK and the EU who have stated publicly that LVCR has been used for a purpose ‘for which it was never intended’. We would agree that the UK has allowed it although they did not actually seem to be aware of most of the abusive circular shipping going on until it was brought to their attention. Still, that doesn’t make it acceptable and as for the suggestion that everything is whiter than white, it’s interesting to note how a phrase like ‘Flowers From Guernsey’ is used instead of ‘Flowers Grown in Guernsey’. In addition, everything has been continually denied, until it’s been shown to be true. That doesn’t look like the behaviour of those using a legitimate tax relief. A legitimate use of LVCR from the Channel Islands does exist but that is for items that are genuinely indigenous and not those round tripped through complex company structures deliberately to avoid VAT by obtaining the relief.

    • If its not such a big problem John, why are you coming on here complaining about it ? Why not stand up for those Channel Island retailers that don’t abuse LVCR and sell local products instead of appearing to generally hate UK retailers for daring to campaign against something that is clearly unjust ? Also if LVCR didn’t exist would you base your mail order fulfilment on The Channel Islands even if it was more efficient to operate on the mainland ? Come on…don’t deny that LVCR makes CI fulfilment to the UK viable when otherwise it wouldn’t be. We are not that stupid.

    • Ok John,
      Let’s look at it a different way. What if the situation was totally reversed and i had a 20% price/tax advantage over you. Your sales would suffer . Would you consequently regard yourself as “a failed businessman” ?
      Dougie

  5. My point is that you are all blaming lvcr for your own failures! You make it sound like successful online retailers only exist in the channel islands because of our supposed abuse of lvcr and we are your excuse for your own failure! This site isn’t about lost vat which u all keep bleating on about or really about lvcr advantage, it’s all about angry failed businessmen that are looking for someone to blame. Correct me if I’m wrong but when you look through the Internet you do find many successful businesses that aren’t run from channel islands? So with that in mind is it you helping out your government to reclaim lost vat that you are after? No I doubt that also! So you think getting rid of lvcr will mean you can then compete and be successful? I also doubt that!

    • We are not sure who specifically your comments are aimed at but we are sure that the many UK mainland business people that support this site, which includes the membership of the Forum of Private Business and the Federation of Small Businesses plus many others, will find your posting amusing as it assumes those who complain about the abuse of LVCR on this site do not run successful businesses. What appears entirely lost on you is that this website is dedicated purely to removing an abuse of European VAT legislation. That’s it. Everything else you raise is irrelevant other than the fact that those that use LVCR for a purpose for which it was not intended are abusing the VAT system. Let us just clarify. VAT Dodgers in the Channel Islands as defined herein are those using LVCR for a purpose for which it was not intended. Every other use of LVCR is legitimate. If you are unsure about what that means, go and ask The European Commission.

    • “Correct me if I’m wrong but when you look through the Internet you do find many successful businesses that aren’t run from channel islands?”

      Rubbish. Not in the online music retail business, because it’s impossible to compete. The market is completely distorted because of LVCR abuse and to such a degree you have to be offshore. This is common knowledge .

      Here’s a quote from The Guardian by Matt Moulding CEO of The Hut.com

      “If you aren’t offshore you couldn’t possibly compete. Your cost price would be above what people would be retailing at”

      OK ?