£60k budget will not pay for LVCR case to go all the way, says lawyer
Saturday 24th December 2011, 2:29PM GMT.
THE money Guernsey has budgeted to challenge the UK’s decision to scrap VAT relief on low value goods exported from the island will not be enough to go all the way through the courts, a leading advocate and barrister has said.
Mourant Ozannes partner Gordon Dawes (pictured) said the cost of fighting the decision would depend on how far the case went, but if it progressed through all the legal stages then the £60,000 Guernsey had put aside would be inadequate.
‘But if they reach an agreement at an early stage then it may be sufficient,’ he said.
‘It could end swiftly or run on for months and months, or years.’
Jersey has allowed £360,000 for its challenge, which will run at the same time.
- To read Guernsey Press stories in full click here for subscription details. Individual editions are now available online.
Thursday 23 February
- Recycling and export is the way forward for waste
- UK mail will arrive later
- Free motoring supplement
- Herm prepares for summer
- Win a night at the White House
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
…….sit back tight….use Jersey’s case as a yardstick…if they win, then Guernsey can just step in and say we want the same…a precedent has been set.
Or is that too simplistic?
Report abuse
It will be interesting if Jersey win and the priciple of applying the same sanctions to the pontential abusers as well as the actual abusers is established. Because should that principle then also apply when it comes to low tax areas.
Report abuse
Just another niche market our States allowed!
The grumbles about it to be allowed in UK been ongoing at least 3 yrs
Now the EU have dictated to UK ban it or else!
Feel sorry for all workers in this niche market. Its up to your employers to think about increasing goods prices and anything to get competitve again.
Now get rid of negative attitude and be brave
Report abuse
Isnt it about time that lawyers fees were reviewed.
Report abuse
TAXPAYERS could be stuck with a £5m bill over the legal challenge to the UK’s plans to crack down on Jersey’s internet mail order industry.
Jersey Post today.
Report abuse
The latest estimate for this challenge is in the millions so who was the idiot who advised The States Department, who is issuing the challenge, that it would only be £65,000?
I`d also like to know why other places affected by this EU law haven`t all joined together to make a combined challenge and split the bill?
I can`t see why, if the businesses are going ahead with their challenges WHY ARE THE STATES CHALLENGING? It`s their businesses let them fight for themselves.
Why should the taxpayer pay for their profit margins?
Report abuse
Nocon, I agree
Unintended Consequences?
Along with LVCR, one of the attractions of the fulfillment business operating in Guernsey is 0% corporate tax.
The question is, will 0% tax along with other measures tempt it to stay?Let’s hope so.
If not, is it perhaps the case that:-
1) 0% tax was a significant factor in persuading some large organisations to operate fulfillment businesses in Guernsey. Encouraged by the prospect of further tax free profits, some operations became enormous.
2) Fulfillment eventually became too big for the UK to ignore.
3) The UK abolished LVCR which meant that all fulfillment businesses were threatened.
4) In a ghastly game of legal Brucie’s Play Your Cards Right “Emm Higher…Emm Higher”, contesting this action in the courts cost millions of pounds.
5) Fulfillment industry disappears leaving a legal bill of £5m, having paid no corporate tax and leaving a largely untrained workforce to take their chances elsewhere.
0-10 always good for business? We’ll find out.
Report abuse
“if they reach an agreement…” Dream on! 60K….that will get you to a full JR hearing..even if you get permission (which I doubt) beyond that you have appeals and then there is the European dimension since this is bound to go to Europe as its VAT (EU law) and of course the EU are not exactly going to support the abuse of LVCR and VAT avoidance. You can be sure it would be appealed all the way through Europe as well even if it had any chance of getting that far. This isn’t the mouse that roared. It’s the cockroach that squished…
Report abuse
No 7. I’d agree you’d base your business in the CI to take advantage of tax but there is no reason you’d operate your fulfilment operation there other than to avoid VAT. Lack of space, weather problems, extra cost of transport, higher wages…. Its completely inconvenient! You seem to forget the physical products have to be moved to CI and sent back again to UK. That doesn’t happen in other forms of tax planning.
Report abuse