In November, the low-value consignment relief (LVCR) threshold in the UK will be cut from £18 to £15. This means Channel Island companies exporting to the UK will have to pay VAT on goods over the value of £15. While this will certainly hit the Channel Island e-commerce industry, the majority of goods, typically DVDs, CDs, printer cartridges and memory cards are priced below £15 and will be unaffected.
The big concern is that this move is just the start of a strategy to remove LVCR altogether or lower the threshold to a level that provides no advance to Channel Island businesses. From what has (and hasn’t) been written in the press, either the States of Jersey and Guernsey are unable to fight the UK government or are not even prepared to go into battle. Should they just stand by, or is there reason to fight? I’ve taken a quick look at some of the potential effects that may result if LVCR is abolished:
Effects on the Channel Islands of removing UK LVCR:
Share your Thoughts
Should more be done to stop the LVCR threshold being reduced further? Are there additional impacts on the Islands’ economy not mentioned above? Should we just bite the bullet and start looking at new growth areas like E-gaming? Please share your thoughts below.