At the bottom of this posting is the song I listened to when I had to close my mail order company The Freak Emporium, in December 2007, after 16 successful and enjoyable years in business. By 2007 it was simply no longer possible to compete from the UK mainland as a result of a major market distortion in online music retail. This distortion had been caused by the abuse of LVCR which had caused all mail order sales to move offshore and drop to price levels within the VAT advantage that was enjoyed by those abusing LVCR. The choice I had was to either close down the business completely or try and move offshore. Much to the disappointment of customers I wasn’t prepared to join in and move offshore. Even if I had decided to do so, that would not have saved the knowledgeable and loyal staff who lost their jobs at my UK office. The injustice of the situation outraged me and when I saw that other retail sectors were going the same way I felt I had to do something about it. Before long other like minded people had joined with me and together we formed Retailers Against VAT Avoidance Schemes and submitted a complaint to the European Commission in 2007.
Now after a long campaign things have come full circle and LVCR abuse from the Channel Islands is also finally ‘over’.
At RAVAS we hope that this kind of tax avoidance market distortion will never be allowed to develop again in the UK. Whilst it’s not going to be possible to completely stop people cheating the tax system – and to quote Churchill “The English never draw a line without blurring it” – it is highly unlikely that we will ever see again the kind of mechanised, industrial, mass VAT avoidance that was supported by almost every high street brand name in the UK. We firmly believe that, now the loophole is closed, Channel Island companies should be able to compete on a level playing field and develop sound business models that are not utilising tax avoidance to adjust their pricing so as to put other retailers at an immediate and unfair disadvantage.
RAVAS is not planning on discussing this issue any further on this website and comments to all postings are now closed.
We would like to thank everyone who was involved in this campaign or supported us particularly the many retailers (large and small) trade bodies, journalists, magazines, blogs, Channel Islanders, MPs, legal and accountancy professionals and UK Government and EU officials who helped us end the abuse of LVCR in the UK. Special thanks to Christopher Vajda QC and Valentina Sloane, Lord Lucas, Richard Murphy, Martin Smith, Helen Smith at IMPALA, Chris Holgate, Alison Wenham at AIM, Bob Jones of Littlejohn LLP and John Biggs of Wellow Business Services.
We have demonstrated that if European law is being breached it is possible to make a successful complaint to the European Commission and we would encourage anyone who is facing similar issues to follow that same process. In theory EU law relies on both the Commission and individuals to police the Treaties. It takes a long time and involves a lot of effort but we can confirm it works!
RAVAS will continue to monitor the LVCR situation with other jurisdictions such as Switzerland and will continue to strive for equality and fairness in the application of VAT and EU taxes in general. We note the unbelievable cries of unfairness and discrimination emanating from the abusers of LVCR and trust that this will fall on deaf ears on behalf of all those that have suffered from the abuse.
RAVAS will reactivate and intervene as and when required. You have been warned.
If you need to contact us please do so here. Thank-you all.
Richard Allen – RAVAS