EU VAT dodge

Reported in This is Guernsey

A SERIOUS threat to the future of the Channel Islands’ successful mail order and Internet fulfilment industry emerged last week when two MPs and the Sunday Telegraph called for the closure of the EU VAT loophole.

This is a predictable reaction given that 2005 is a likely election year in the UK. In addition, the arrival of Tesco and Amazon in Jersey has heightened the profile of the loophole’s exploitation.

Under current EU VAT laws, goods under £18 imported into union territory are not liable to VAT. As the Channel Islands are outside the EU, companies can set up here and export goods under £18 to the UK, France etc. without charging VAT to the customer.

Just as an interesting aside. The Isle of Man and the Channel Islands (i.e. the separate bailiwicks of Guernsey and Jersey) are not part of the United Kingdom, but are classified as Crown Dependencies. They each have their own legislature, system of laws, and taxation, and they are not represented in the UK Parliament. Nor are they members of the European Union, though they do have special trading rights with it. The UK is responsible for their defence and for their international relations, and the inhabitants of all the islands are British citizens with the right of abode in the UK. i.e. they are classed as EU Citizens too, but not subject to the rights and duties afforded under the nonsense of Article 17 (8) ECT or the proposed Article 1-10 of the EU Constitution.

What a rats nest, "Britain Back" to Westminster, "not Forward" to Brussels


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