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VAT imposed on Channel Island imports

27th March 2012

The High Court has ruled that goods imported from the Channel Islands will no longer be exempt from VAT charges.  

Jersey and Guernsey had launched a joint judicial review bid into the government’s recent decision to exclude the two islands from the European Low-Value Consignment Relief (LVCR) law, which allows relatively low-value mail-order imports to escape the tax.

Mr Justice Mitting decided that the new rule, which came into effect on 26th March, was justifiable because traders with Channel Island bases have enjoyed an unfair advantage over mainland UK retailers for some time and were seen to have employed abusive practices.

After the recent Budget revealed that a number of items will now be subject to VAT which were not before – including hot food in supermarkets and static caravans – it is expected that those with solicitor jobs in London will have a busy few months ahead of them as they deal with appeals expected to be lodged by some of the businesses affected.