Channel Island VAT loophole ends

The Channel Islands' VAT loophole, Low Value Consignment Relief (LVCR), ended on April 1.

Jersey and Guernsey governments took the fight against the scrapping of LVCR to the UK High Court, but lost but the States may still appeal on April 2 or 3.

The Jersey and Guernsey governments said hundreds of jobs across both islands were at risk.

LVCR meant no VAT was charged on goods under £15, such as bedding plants, when sent to the UK from outside of the European Union.

Mainland-based grower Derek Jarman of Hayloft Plants, who has campaigned for the end of LVCR, said: "The Channel Islands who now compete with the mainland on a level playing field rather than with a 20% advantage."

Horticulture Week 30 March found that Thompson & Morgan had looked at Switzwerland as a non-EU country to import form VAT-free, but dismissed the idea as logistically to expensive.

Boley Smillie, chief executive of Guernsey Post, said:

"To put the price increase into perspective, the loss of LVCR will reduce our profit by £3.7m over the next 12 months."


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