High Court confirms 'cheap DVD' tax loophole will close
Rules Chancellor's plan is not illegal
The English High Court has ruled that the government may close a tax loophole allowing online retailers to ship low-cost goods from the Channel Islands VAT free.
Chancellor George Osborne said in November 2011 that the Low Value Consignment Relief (LVCR) provision would be abolished on 1 April 2012.
The plan was challenged in the High Court the Governments of Jersey and Guernsey, which claimed the ban would not only discriminate against its exports but was also illegal.
However, the Court yesterday ruled that the Treasury was was within its rights to abolish LVCR.
LVCR allows companies to ship goods priced at less than £15 to be shipped into the UK from outside the European Union without attracting the 20 per cent VAT sales tax. It was originally implemented to speed the import of small shipments of perishable goods into the UK.
However, many online resellers have cottoned on to the loophole during the past two decades, most notably shipping CDs, DVDs and, more recently, Blu-ray Discs from Jersey and Guernsey, which are not part of the EU, to allow them to offer buyers even lower prices.
The practice, the Treasury has estimated, costs the Exchequer around £110m a year. ®
COMMENTS
Meanwhile...
...major corporates continue to avoid paying any tax with the blessing of HMRC. But so long as the public get it in the neck, who cares?
Here we go again.
£110M/year in lost taxes on overpriced DVDs
£50,000M bank bailout.
Which do you think bothers me more?
Especially when the ************************ still want to charge me 3.7% interest on my mortgage.
Re: Meanwhile...
Couldn't have put it better:- even when we found out companies have been dodging billions in tax (vodafone) we sit on our hands.
Yet for the everyday punter trying to save a few quid on a film, you receive the cold unflinching shaft of the tax man.
Parkinson's Law of Triviality
This is a classic example Parkinson's Law of Triviality, also known as bikeshedding.
In 1957 Parkinson's put forward the argument that organisations give disproportionate attention to trivial issues. Parkinson gave the example of a committee responsible for building a bike shed and a nuclear power station. The committee are happy to sign off on the power station based on the management summary because of 2 reasons 1) they haven’t an effing clue about how a nuclear power station works and 2) the amounts of money involved are meaningless as they are out of the range of their life experience.
However when it come to building a bike shed for £200 everybody has an opinion.
For the small minded taxman it works like this:-
Owe the taxman £200; That’s a nice DVD surround sound system.
Owe the taxman £2,000; That’s a nice package holiday.
Owe the taxman £20,000; That’s a nice big car.
Owe the taxman £6,000,000,000; That’s a “how can we help you sir, that number incomprehensible to me”.
I’m also sure that the copyright mafiaa did some bribing lobbying on this to ensure the plebs pay more for their music.
Re: Meanwhile...
If they wanted to save 100M quid then about not using the assclowns at EDS (now HP?) for IT contracts and let the taxpayer at least enjoy slightly cheaper mail order goodies.
Oh feck... there's a budget round the corner, too, isn't there. Deep joy.
