Refresh Cartridges’ Chris Holgate discusses closure of VAT loophole in Channel Islands on popular technology website PC Advisor.
Chris Holgate, Director of printer cartridge supplier Refresh Cartridges, has written an article for PC Advisor titled ‘Channel Islands VAT loophole closed: LVCR explained’, which details the circumstances surrounding the closure of a VAT loophole that was apparent in the Channel Islands until April 2012, and which had allowed a number of companies to import goods into the UK VAT-free, including Play.com, Amazon and HMV.
Holgate had previously expressed his dissatisfaction of the Low Value Consignment Relief (LVCR) loophole to The Recycler in March last year after noting that the “vast majority” of cartridges were being shipped from the Channel Islands, commenting that “almost all of the major players have moved offshore. Our products don’t make a huge margin, you can’t compete. It’s quite soul-destroying as we have had some customers thinking we are ripping them off”.
In his article, Holgate reflects on the ways in which companies previously taking advantage of the LVCR loophole have dealt with the law change: “A few companies refused to admit defeat and have moved to other areas such as Switzerland. There, LVCR relief still applies as the UK government has only partially closed the loophole.”
He adds that: “Curiously, The Guardian claims that Thehut.com group is now routinely sending DVDs on a 7,000 mile round trip to Chicago and back in order to avoid having to charge the VAT.” However, Holgate points out that this may be “futile as the UK government has now set a precedent to close the relief for any other area that might become problematic. Therefore investing in new warehousing, staff training and infrastructure may not make sound business sense”.