We are often told by UK politicians and civil servants that LVCR ‘exploitation’ is under control and that companies are being prevented from setting up offshore as a result of policies that have been put in place on The Channel Islands. Indeed RAVAS holds letters from the head of HMRC and UK Ministers saying exactly that. But the reality is that if you have the money, want to avoid VAT and can afford the consultants and trust companies, then you can set up a structure that will allow you to legally gain tax efficiencies by shipping goods from an offshore location to avoid VAT. It is very easy to find the information as to how to do this on the internet since the companies that offer these kinds of services advertise them on their web sites. We thought we would provide a links page to show how this kind of scheme can be operated. We would like to point out that this is all completely legal and these companies are doing nothing wrong, however we believe that the ‘exploitation’ of LVCR as allowed by the UK Authorities application of LVCR is highly questionable, and contra to EU directives. It is currently the subject of a complaint to the European Union (see the section of this website The Abuse of LVCR)
Here is the RAVAS guide to setting up a business off shore and staking your claim in the VAT free mail order business:-
Essentially to cover all bases you need to employ the following services :
1.) RKG Consulting (or a similar company) can provide a legal Tax avoidance strategy
2.) Basel Trust (or another Trust company) would incorporate a Jersey Company, obtain a license to trade, register for VAT-prepayment and provide Directors located in the juristriction of either Jersey, or Guernsey so that control is seen as coming from the Islands.
3.) PFS (or another fulfillment company) will store goods and pick/pack and ship them upon instruction, usually from a director of the UK company
4.) Foreshore (or another webhost in one of the juristrictions) will provide web hosting, so that the order is actually placed on servers located outside of the EU. According to the Foreshore website ‘the location of servers can define where business is being undertaken which can influence where the business is seen to be established’ .
Further reading :
The Foreshore site highlights the tax/vat benefits of Jersey: http://www.foreshore.net/jersey
RKG Consulting are specialists in legal LVCR VAT avoidance tax structures :