Tax advantage is investigated
Complaints about tax advantages enjoyed by some mail order retailers in the Channel Islands are to be investigated. In Jersey and Guernsey, low value consignment relief means items less than £18 can be sold VAT-free if they come from outside the European Union.
UK retailers who cannot compete have taken their concerns to Brussels. The European Commission's taxation division said it was in contact with the UK government about the so-called "VAT loophole".
Retailers in the UK are reported to have raised their concerns but claim they have been left "dissatisfied" with the outcome of talks. Spokeswoman Maria Assimakopoulou from the EC taxation division said its findings would be released once the investigation was finished, but it was too early to comment further.
When the States of Jersey said it was stopping the licences of firms which distributed cut-price CDs and DVDs for major UK chain stores, Tesco moved its mail-order operations from Jersey to Zurich in Switzerland.
article from BBC News service
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