Small business group joy at CD VAT move
NORTH West small business pressure group The Forum of Private Business has welcomed the Government’s plan to change the tax rules that have allowed retailers to avoid paying VAT by sending goods such as CDs, and DVDs from the Channel Islands.
Low Value Consignment Relief (LVCR) will not apply to goods sent from the Channel Islands to the UK from April 1 next year.
The loophole has been used by companies selling CDs and DVDs online, such as Cheshire’s The Hut Group and online rivals such as Play.com, Tesco and Amazon.
The measure was originally designed to speed up the transit of low value perishable goods through the postal system, but was adopted by large retailers to slash their online prices, and effectively allowing them to significantly undercut smaller, independent retailers.
Jane Bennett, head of campaigns at the Knutsford-based organisation said: “The Forum has been campaigning on this issue for years and we’ve been calling for an end to this as part of our Get Britain Trading campaign, so it’s excellent news.
“Virtually all the main players in the online industry mail CDs and other similar items like Blu-Ray discs from the Channel Islands to customers. This totally unfair loophole has allowed them to totally dominate the market and put thousands of small, independent traders out of business.
“The announcement will mean at long last a level playing field in the market, and the remaining independent record shops will be able to compete with the big boys on equal terms again. It’s excellent news for the high street.”
The move should have limited impact on The Hut as CD and DVD sales are a much smaller proportion of its total sales as a result of its move into fashion, nutrition and health and well-being.
