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Happy New Year to UK Small Businesses from HMRC and The Treasury !

If you run a business on the UK mainland selling anything that can be sold mail order up to a value of £18 and have to account for VAT  then from the 4th of January 2011,  when VAT goes up from 17.5% to 20%,   you will  have to suffer a 2.5% increase in VAT whilst your  Channel Island based competitors will avoid the increase and be able to sell the same goods in the UK VAT free. Furthermore those who can afford to avoid VAT  in The Channel Islands – through the exploitation of LVCR –  have  effectively been handed a 2.5% increase in their profit margin!

HMRC and The Treasury could end this scandalous market distortion and tax avoidance today, just as they could have prevented it at any time since 1995,  but they have failed to do so.

It makes you proud to be British!

Happy New Year!

Support RAVAS and end this scandal now!

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8 Responses to Happy New Year to UK Small Businesses from HMRC and The Treasury !

  1. Every time I write out a cheque for VAT to the Inland Revenue I think of the VAT that my competitors avoid on exactly the same UK products that I am selling and my blood boils. Words fail me.

  2. I feel like I’ve been punched in the face by HMRC when I think about the unfair advantage handed to my competitors.

    Some products we only make a couple of percent on so even if we sell at cost we’re probably still going to be around 17 percent more expensive than our Jersey based competitors after the VAT increase.

    Some products we make decent margins on and so we can remain competitive but only by slashing our margins. The extra a Jersey based competitor makes is then just pocketed by the directors of the company.

    We’re not a small company and employ a number of people on the UK mainland – Why does our government want me to sack them all and go offshore?

  3. I scrape by on a tiny margin as it is. This could be the final straw. My Channel Island competitors can match my price when I’m making nothing and still make a 20% margin. Everyday I expect to wake up from this nightmare.

  4. In addition to the the five years of correspondence and meetings I have had with HMRC and The Treasury, six months ago I started discussing with HMRC the issue of the VAT rise in relation to LVCR abuse. Over that period they have failed to do anything, before VAT goes up, to correct what is already a major market distortion. There is no other word for the way The Treasury and HMRC have treated UK business in relation to this VAT abuse. Negligently. The evidence is clear for all to see.

  5. I just came across your website and I’m so glad to know I’m not alone. I sell car parts and have been putting up with this for a few years now and its been killing our business. I have a family in the UK and we are not a huge business but when you see UK products being sold from Jersey and Guernsey VAT free, that would have to have been exported there first and you know they are paying the same price as you to buy them but you can’t compete with the fact they are not charging VAT it’s just soul destroying. I mean what are we supposed to do ? Lay down and die ? I hope you can do something to stop this.

  6. This disastrous favouritism has already destroyed the wealth of independant shops we used to enjoy on the High Streets, anyone remember Record/CD shops?
    Without a level playing field there is no hope for the future. Where are the Lib Dems and their supposed solidarity with small businesses?

  7. I think everyone needs to get a grip. We sell online from the channel islands and struggle to compete with all the uk sellers who aren’t actually registered for vat or any other taxes!
    Bogus addresses and contact details would rake in far more than the vatt alone.
    As for the plight of Cd’s, who on earth goes to a shop to buy a cd anymore? Buy it from one of the many unregistered businesses on eBay or download from iTunes.

  8. Alan : To be honest, if you’re selling to the UK Mainland and have a 20% advantage over every legitimate business based there but are still struggling to compete then I can’t help but feel that you’re doing something wrong.

    You won’t get any arguments here that bogus businesses can be a problem however our gripe is with huge multi-million pound businesses such as the Hut Group having an unsustainable advantage over UK shops rather than little Johnny selling some stuff on eBay.

    As for your comment about the plight of CD’s; Play received 1,200 orders a minute at it’s busiest point over the Christmas period last year. There is clearly big business outside of buying off eBay or downloading from iTunes and it’s only right that individuals that choose to stay in their hometowns on the UK mainland should be allowed to compete on an even playing field.