UK retailers no longer able to benefit from tax loophole
UK retailers attempting to exploit a tax loophole to sell VAT-free CDs and DVDs will not be allowed to set up in Guernsey, the island's commerce department said.

The announcement followed yesterday's decision by neighbouring Channel island Jersey to crack down on its own low-value consignment relief, allowing goods worth less than£18 to be imported into the EU without value-added tax.

Under a new licensing system, those UK companies operating through Jersey-based distributors will have to pull out within a year. Those affected include Amazon, Asda, Boots, Tesco and Woolworths.

Guernsey already hosts HMV's online distribution operations but said planning permission will not be granted for any more warehouses for distributors acting for UK retailers or housing licences for their employees.

The island has virtually full employment and its Commerce and Employment Department said Guernsey had neither the space nor labour available to expand its third-party distribution industry.

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