Weather outweighs tax change

Wet season overshadowed loss of Low Value Consignment Relief, say Channel Island suppliers.

The effects of scrapping Low Value Consignment Relief (LVCR) in the Channel Islands have been overshadowed by this year's poor weather, growers have said.

LVCR, which allowed VAT to be waived on goods under £15 being imported into the UK, ended on 1 April, prompting fears that horticultural mail-order businesses would suffer from resulting price rises.

BBC News reported that the amount of freight leaving Guernsey dropped by 39 per cent since 1 April, according to distributor Ferryspeed.

"It's difficult to tell if it has been the weather or LVCR," said JR Jersey Horticulture owner Joel Richardson. "Next year we'll be able to see better if the weather has buried the impact.

"We have lost a bit of business. We had a storming start to the season then it tailed off as soon as the weather turned, so we're assuming it's the weather. Tax might have more of an impact with certain products."

Jersey Plants Direct founder Tim Dunningham agreed that it is difficult to tell. "There's also been the recession and the Olympics so it's impossible to pick it out," he said.

"I don't think it's that significant. Losing LVCR in itself would not have been too bad, apart from that it went in the middle of the season when prices had already been set. It's been a difficult season with the weather."

He added that it is harder for mail-order companies than retailers, who can catch up with good weather on weekends. "Everything has been affected. Hopefully now the Olympics are over people will be so euphoric they will want to buy plants."

You Garden owner Peter McDermott added: "The weather has had a more meaningful impact than LVCR on JR, Thompson & Morgan and Jersey Plants Direct. For any established business it's been appalling compared to last year."

He added that results will pan out in 2013, especially with Dunningham taking over the assets of Gardening Direct (HW, 20 July). "LVCR was for horticulture and fresh produce and was shockingly badly legislated. I feel sorry for Richardson and Dunningham who are Jerseymen and legitimate LVCR users. It's been taken away from them because other people have pushed the rules to the limit.

"The likes of Play.com and Healthspan don't have the perishability concerns of horticulture so will go to Switzerland or look at another legal way around the problem. The chancellor won't see a material benefit."

KeyStat

39% - Drop in the amount of freight leaving Guernsey following the end of LVCR on 1 April, according to distributor Ferryspeed


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