Esteemed UK music publication MOJO Magazine has highlighted the VAT loophole in it’s April edition. Spokesperson for RAVAS Richard Allen is quoted in the article which highlights the dilemma facing music buyers who want cheap music but at the same time mourn the loss of independent retailers that are so important to serious music consumers and new artists. Allen is has also had a successful career in the music industry running the highly regarded label Delerium Records (responsible for discovering the internationally successful Porcupine Tree) as well as the much loved internet retail operation The Freak Emporium – which had to close down due to offshore VAT free competition. The article is reproduced at the bottom of this posting.
Recently the Commerce and Employment department of The Guernsey Government along with the Guernsey Bulk mailers association produced a document called Setting The Record Straight which claims to show that Supermarkets, not VAT avoiding retailers in The Channel Islands, are putting UK record shops out of business. Despite this document having been made public in the Guernsey Press RAVAS, The Guardian, The Entertainment Retailers Association and The Telegraph have all been unable to obtain a copy. The Guernsey authorities claim that even though this document is titled Setting The Record Straight and has been circulated to a local newspaper, it’s for internal use only.
Richard Allen comments :
“I suspect that the reason they don’t want anyone to see it is because its an unsustainable argument. To suggest that supermarkets are the problem when they only sell a very limited range of chart albums and have been around far longer than VAT avoidance is stretching credibility and existing evidence. In my entire career I’ve never sold a record to a supermarket, yet the band I managed recently sold out the Royal Albert Hall. Those who have seen the recent Yell.com advert about Day V Lately are probably, like me, wondering what town in the UK Mr Lately lives in that appears to have so many record shops? The sad fact is that thanks to VAT free internet retailers undercutting everyone these days you’d be hard pressed to find even one record shop within 20 miles of your home and certainly if your taste was anything other than mainstream you wouldn’t find anything of interest in your local supermarket. The VAT abuse has forced consumers to buy on-line, even if they would prefer to spend a Saturday afternoon in a shop. Book buyers can still enjoy the specialist retail experience in a bookshop, and that’s because the fact that no VAT exists on books has prevented offshore VAT avoiders from cornering the book market”