Fulfilment trade faces beginning of the end
Thursday 24th March 2011, 2:30PM GMT.
Chancellor George Osborne delivered the first blow of what could be a knockout attack on the island’s fulfilment industry in his Budget yesterday.
GUERNSEY’S fulfilment industry came under attack yesterday as the UK pledged to end the ‘exploitation’ of VAT relief on low value goods sent from the island.
It announced that from 1 November, only goods valued at £15 and under can be sent from Guernsey to the UK VAT free, down from the current limit of £18.
And it promised a further clampdown after announcing plans to consult with the European Commission on its options for limiting the scope of the relief.
It is understood that this could lead to an attempt by the UK to remove certain items – possibly CDs and DVDs – from forming part of the relief.
- More details and two pages of budget reaction in the Press. See below for subscription details.
- To read Guernsey Press stories in full click here for subscription details. Individual editions are now available online.
Island Life
All about Guernsey
Ambassador of the Year 2011
History & Heritage
Visitor Information
Guernsey's government
Campaigns
Voice For Victims
Voice for Victims is a campaign aimed at promoting the rights of those affected by child sexual abuse.
This is Guernsey
Guernsey Press
Useful Links
its just a way for the uk to get us here on GUernsey to dig them out of a hole, we don’t use any services in England so why should we pay for them, I say we finally become a separate country why do we have to be part of England.
Report abuse
Rule Brittania
The exodus gets more support
God Bless The Queen
Report abuse
Change was much less severe than many of us had been led to believe.
And it doesn’t “promise a further clampdown”, rather “discussions are ongoing”.
http://www.ukbudget.com/UKBudget2011/business/indirect-tax/UKBudget2011-indirect-tax-Low-value-consignment-relief.cfm
Report abuse
william
god bless you
engage brain please your making guernsey look stupid
Report abuse
Lowering the threshold by £3 will have a minimal impact. Most CDs and DVDs cost less than £15 anyway.
William – we are not part of England, if we were this story wouldn’t exist as we’d be paying UK VAT…..
Report abuse
Interesting as the Guiton Group’s other paper said that the budget would have little impact on Jersey’s fulfilment business as not much change between £18 and £15. Which one is it GEP/JEP journalists?
Report abuse
William. Guernsey is not part of England. I suggest you do some research before you post a comment.
Report abuse
PBFalla
Whilst on the subject of stupid…. your sentence should read ‘engage brain please you’re making Guernsey look stupid’
Oh, and by the way, if Guernsey is such a dreadful place (one that you have been lucky to escape from) what is your need to spend time on the ‘This is Guernsey’ forum. I would have thought you would be keen to ‘move on’.
Report abuse
Surely this was to be expected in tough economic times. The UK government is doing no more than trying to maximise its revenues while also trying to shield UK businesses from what it sees as unfair competition from the Island.
You have to accept that it was a (legitimate) tax loophole that was exploited and so there should be no outcries.
I would hope the entrepreneurs on the Island will already be looking for fresh ideas!!
Report abuse
and william, no one is saying that WE should pay VAT, just that UK consumers should pay VAT.
If they want to change those rules which apply only to themselves, then they are perfectly entitled to do so.
Report abuse
Rob Roy you too have noticed how the GP and the JEP spin different angles on the same story.
Report abuse
Ah Well!!!
All good things come to an end.
Report abuse
William if you buy something from the UK you can buy it under what is called drawback. That means the vendor you are purchsing it from can drawback the VAT and sell it to you VAT free. So you see if you buy from the UK you don’t have to pay VAT.
Not only that even though you haven’
t paid VAT you are still considered to have purchased it in the UK so are protected by UK comsumer laws. Which means unlike Guernsey if the item you have bought is not of merchantable quality(breaks) within a year unlike Guernsey where you are only entitled to get it repaired, you are entitled to have it replaced by a new item or have your money refunded. If you get any problems with the vendor you can then contact the Trading Standards in his area who will then assist you to get what the law entitles you to.
Not bad for such a wicked country, eh!.
Report abuse
Burdock
Im the leader of the exodus,i will be the last to turn the lights out after the people of guernsey have left 2 by 2
Report abuse
I haven`t yet seen evidence of a mass exodus from the island and the population figures don`t seem to indicate one either.
Even if such a departure en masse did take place, then at least there`d be more room on the roads again for horses, cyclists and 20mph granny drivers ;-)
Report abuse
There are a number of points in this story that don’t seem to either add up or have not been represented properly.
Firstly the argument from the flower sellers – having just visited the website of one local online flower retailer I could not find a single product on their site for less than £18 never mind £15. Where does this fit with the fuss made in the paper the other day?
Secondly if the UK government decides to
a) Reduce the amount of LVCR to the minimum of 10 euro then this still allows for CDs, health products etc that will fall under this amount and other products that wont – as is the case currently – So no change there then!
b) Remove CDs, DVDs etc from the allowance – then this will apply to all companies selling these products no matter where they are based not just the channel islands so everyone is in the same boat.
This will then leave these companies with a decision on where to be located.
There are some that have made considerable investment to their business in the CI so are they going to relocate to the UK with its higher corporation tax and VAT issues? Or are they going to stay where they are and accept that things have changed?
Report abuse
Usual GP trying to scaremonger. Many of the fulfilment businesses have enough buying power now to keep the few items that actually come under the LVCR at a competitive price regardless.
As for our relationship with the UK, I think if you actually weigh up the pros and cons we get the better end of the deal.
And exodus? The only exodus I have witnessed is that of schoolmates who went to Uni (which we pay for) and then couldn’t afford to come back or had better options on the mainland.
Report abuse
Don’t really see why this has to be the end, unless the companies are not efficient enough to be competitive with the rest of European retailers. If they really are here only to profit from a tax loophole then that is different.
Report abuse
As retaliation we could put an extra tax on all cars made in the UK and Flybe
Report abuse
I. LePage – and that would help us how, exactly??!!?
Report abuse
I cannot understand why people refer to this as a loophole…it was all perfectly legal! If a system exists that ALLOWS you to do it, how can that be considered abuse? I do feel for the people who might lose their jobs because of this though. Maybe it is time for us to look at manufacturing some niche products on island that could give us a sustainable industry. Time to put our thinking caps on!!!!
Report abuse
William.
The Guernsey Immigration Department itself says that the island is not part of England or the UK. Although that being the case why do Guerns cling on to the UK flag and the UK monarch?
In any case the island is far too insignificant to dig the UK out its current financial hole.
Why indeed should you pay for any services in the UK that you don’t use. So when you do need to use services that are not provided on Guernsey but are provided in the UK you won’t mind paying for them, will you?
Report abuse
“If a system exists that ALLOWS you to do it, how can that be considered abuse”
Think of it like selling property via share transfer. Perfectly legal but only conducted by the few to the few.
Imagine someone sets up a firm called Guernsey Share Transfers Limited and every single house in Guernsey is now sold via share transfer avoiding all document duty. How long do you think this ‘loophole’ would last when the SOG realised it was losing all the Document Duty revenue?
All of about 5 minutes?
Report abuse
Coyote
do get it right – when Guernsey uses UK services as we can’t provide them here, we pay for them
Hospital treatment in UK – States or individuals pay – education Guernsey pays full wack for our University students etc etc
Not a real student of History either are you from your exceedingly ill informed comments about the Monarchy and the links with the British Isles
Report abuse
Neil
I’ll wager the animal rights people would love to see the day when law changes can be made in five minutes
I believe there has been a sub committee led by Jack Honeybill looking into the share transfer loophole for several months now with no sign of progress
Perhaps they should speak to the Alderney delegates as their share transfer loophole was closed several years ago
Report abuse
This story runs similar veins to the exodus,the beginning of the end is nigh
Rule Brittania
Report abuse
Hugo
Do learn to read properly. Where did I say that you didn’t pay for services used? I commented that you would be happy to pay for services when they were used which you have just confirmed for me.
It is precisely because I am a historian that I made my comments. Guernsey is ‘… not part of the UK; it is part of the British Isles…’ [Guernsey Immigration Dept 2010]. A thin dividing line if ever I saw one.
So you get your facts right. The island is a Crown Dependency [like Jersey and the Isle of Man]which has owed allegiance to the British Crown since bad King John did a questionable deal with the islanders back in 1204. Today that translates as the island having to tow the UK foreign policy line but otherwise it does its own thing in everything. Ditto Jersy and Isle of Man.
Differences being that Jersy and the Isle of Man fly their OWN flags, not the Union Jack, which is the UK flag, and they do not cling on to the Queen’s skirts like she was their mother. Guernsey takes immense pride in its independence from Whitehall and on taking no notice of UK laws or UK domestic directives so WHY fly the UK flag at Charles Froissard House instead of the Guernsey flag.
You didn’t answer my questions because you couldn’t.
Report abuse