Channel Islands VAT loophole to close

Graham_Devon

Surely going to cripple the Channel Islands?

http://www.bbc.co.uk/news/business-15646470

However, I'm sure that UK based retailers will be rejoicing.

A._Badger

Graham_Devon wrote: »

Surely going to cripple the Channel Islands?

http://www.bbc.co.uk/news/business-15646470

However, I'm sure that UK based retailers will be rejoicing.

Not many will shed tears over the likes of Tesco, Amazon and other mainland giants but many smaller businesses in the CIs will also suffer.

Still, as long as we keep on raising taxes, eh?

zenmaster

After due consideration I think this to be fair as, effectively, the CI retailers were being subsidised to the detriment of mainland businesses.

dkmax_2

zenmaster wrote: »

After due consideration I think this to be fair as, effectively, the CI retailers were being subsidised to the detriment of mainland businesses.

But imports from the EU pay no additional VAT to the UK either. If the sales are not repatriated to the UK - and there is no evidence yet that they will be - then there is no gain for HMRC or mainland businesses.

roddydogs

? Goodbye "Play"??

ChiefGrasscutter

Move to electronic download totally and abandon the physical CD/DVD?

kabayiri

ChiefGrasscutter wrote: »

Move to electronic download totally and abandon the physical CD/DVD?

Or..as an alternative, they could 'burn on demand' at a selected Tesco store, for example.

The download part could be sourced from some low tax environment, and this part 'deemed' to account for a decent part of the value of the product. The media part would carry the remedial value.

I'm sure they will dream up alternatives.

When we say a dramatic effect on CI employment, do they actually spell out the numbers? I suspect it may not be that high. The last 'pick and place' warehouse automation I was involved with didn't really require that many people to run it.

chris_m

ChiefGrasscutter wrote: »

Move to electronic download totally and abandon the physical CD/DVD?

VAT is still chargeable - I believe that HMRC have worked with suppliers in other countries (eg the US) to get them to charge VAT to buyers from the UK.

Graham_Devon

ChiefGrasscutter wrote: »

Move to electronic download totally and abandon the physical CD/DVD?

Downloads would then simply increase in price.

Theres many times when I have looked at downloading an album, only to find it's actually cheaper to get it sent to my house in CD form.

wotsthat

From the BBC article...

The government said the loophole was now costing £140m a year.

£140m is the VAT that the government has lost IF it's assumed that the sales remain at the same level pre and post change. I've seen it reported that this will raise £140m which is quite clearly wrong. If the cost of something increases by 20% then it's likely that sales will decrease. This has got to be especially true of items which are non-essential and easily faked.

It's always seemed odd to me that this exemption was in place anyway but it's good news for the car boot pirates.

noh

roddydogs wrote: »

? Goodbye "Play"??

Play was recently sold in anticipation of this ruling.

http://www.guardian.co.uk/business/2011/sep/21/playcom-sold-rakuten-japan