Feeds

Dot-coms' VAT-swerve hurts small biz

Ecommerce giants not paying tax

The essential guide to IT transformation

The Forum of Private Business, which represents small and medium-sized businesses, is calling on the Treasury to close a loophole which allows ecommerce firms based in the Channel Islands to sell goods VAT-free to UK consumers.

It cites the example of Tesco.com, based in Jersey, which is selling the latest Oasis dirge for £8.07 rather than a recomended retail price of £15.99. Tesco can do this because it doesn't have to pay, or charge, VAT on goods despatched from the Channel Islands. Items worth less than £18 can be imported by individuals into the UK without paying VAT.

The FPB wants the Treasury to immediately lower this threshold from €22 to €10 (about £7). The association believes this would make the business unprofitable. But it is also calling on the Treasury to ask the EC for special dispensation to close the loophole completely.

John Healey, finance secretary at the Treasury, told a select committee in February that the loophole was already costing the country £80m a year and this was expected to rise to £200m in two years. CDs, DVDs and contact lenses are among the most popular items sold.

A Treasury spokesperson told the Reg: "Goods imported into the UK are generally chargeable with VAT. The rules in this area are complex and vary depending on the nature of the supply and the value of the supply and we keep the matter closely under review."

The FPB says Amazon, Asda, Boots, HMV and Woolies are also all selling goods from Jersey. FPB members say they cannot compete in a market where their distributors charge them more for a CD than they can buy it from Tesco's website.

The National Audit Office is preparing a report on the subject, called VAT on e-commerce, which will be published early next year, more details here. More from the FPB here.®

Next gen security for virtualised datacentres

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Kaspersky backpedals on 'done nothing wrong, nothing to fear' blather
Founder (and internet passport fan) now says privacy is precious
TROLL SLAYER Google grabs $1.3 MEEELLION in patent counter-suit
Chocolate Factory hits back at firm for suing customers
Mozilla's 'Tiles' ads debut in new Firefox nightlies
You can try turning them off and on again
Sit tight, fanbois. Apple's '$400' wearable release slips into early 2015
Sources: time to put in plenty of clock-watching for' iWatch
Ex-IBM CEO John Akers dies at 79
An era disrupted by the advent of the PC
prev story

Whitepapers

5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Backing up Big Data
Solving backup challenges and “protect everything from everywhere,” as we move into the era of big data management and the adoption of BYOD.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?