MiPod: a matter of taste
#1Submitted by ann on Fri, 25/03/2011 - 13:29.
LVCR is an EU relief. Article 23 of Directive 2009/132 provides that goods of a total value of less than €10 must be VAT-free when they are imported into the EU. Article 23 allows Member States to increase this limit to a maximum of €22. The current UK limit of £18 is laid down by the VAT (Imported Goods) Relief Order 1984.
From 1st November 2011 LVCR will be reduced from £18 to £15. As many of the commentators on this change have pointed out most DVDs and CDs cost less than £15 so what’s the point?
Apparently the annual cost of LVCR to the UK has risen from £85m to £130m over the last five years, reflecting the growth of internet shopping and the willingness of UK companies to relocate their operations outside the EU (mainly in the Channel Islands) to exploit the relief. The UK government are intending to discuss ways of preventing exploitation of LVCR with the European Commission and if a workable solution cannot be found LVCR will be reduced further.
Those of you who have read Spilling the beans or its a mug's game will be alarmed to hear that the change will mean an increase in the number of packages where the UK Border Agency has to apply a VAT charge manually.
#2Submitted by ann on Sun, 13/11/2011 - 12:27.
LVCR will not apply to supplies of goods from the Channel Islands from 1st April 2012. The changes were annouced by the Exchequer Secretary to the Treasury in a Written Ministerial Statement on 9th November 2011.
Draft legislation will be published on 6th December and will be included in the 2012 Finance Bill.
#3Submitted by ann on Mon, 14/11/2011 - 15:28.
It is understood from news reports that Healthspan, a supplier of health supplements from Guernsey, is considering challenging the proposed change on the grounds that, as article 23 of Directive 2009/132 gives Member States the power to exclude from LVCR goods which have been ‘imported on mail order’, the change cannot be limited to mail order goods from one area but must apply to all such goods otherwise it is discriminatory.
#4Submitted by ann on Mon, 19/03/2012 - 11:40.
A challenge by the Guernsey and Jersey governments to the LVCR changes has failed according to a recent article in Accountancy Age. There is also coverage in the Guardian. This means that from 1 April 2012 the LVCR will no longer be available for imports from the Channel Islands. It has been suggested that some of the large retailers affected by this change will simply move the operation to another non-EU country such as Switzerland.
#5Submitted by ann on Tue, 27/11/2012 - 12:03.
The Guardian has recently reported that online retailer, The Hut, has closed its warehouse in Guernsey and is now shipping from a site outside Chicago to preserve its entitlement to LVCR.
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