Home » VAT » Guernsey Minister Responsible for ‘Fulfilment’ Industry Claims Island did not Encourage LVCR Abuse and that UK Retailers did not Move to the Island to Avoid VAT

Guernsey Minister Responsible for ‘Fulfilment’ Industry Claims Island did not Encourage LVCR Abuse and that UK Retailers did not Move to the Island to Avoid VAT

Richard Allen spokesperson for RAVAS confronted Deputy Carla McNulty Bauer Minister for  Commerce and Employment in Guernsey who worked in the Fulfilment industry and was involved in HMV’s move to the Island in 2004.

During the exchange Deputy McNulty Bauer stated that she did not encourage companies to set up their internet operations in Guernsey and that retailers were not moving to Guernsey to avoid VAT. Deputy Peter Sirett who also appeared on the programme echoed Deputy McNulty Bauer’s comments stating that companies moved to the island for reasons other than VAT avoidance.

Deputy McNulty Bauer was challenged on the programme by a caller over her claim that HMV was allowed to set up operations on the Island because it was prepared to open a shop and invest money in the Island rather than just set up a ‘brass plate’ fulfilment operation. This distinction between a ‘brass plate’ company with no presence on the Island and the existence of a genuine record shop would appear to be questionable and it seems improbable that HMV would avoid a cheaper,  purely ‘brass plate’ operation unless investing money and setting up a shop was a condition of their moving to Guernsey to take advantage of LVCR. Deputy McNulty Bauer failed to acknowledge that the Guernsey Government had encouraged the creation of jobs and employment on the back of an import tax relief which was governed by a non discretionary obligation on the UK to prevent it being used for VAT avoidance.

Two excerpts from the programme can be found in the audio clip below:

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