Industry News with Grant Twine

Update on HM Treasury’s announcement of the end of Low Value Consignment Relief (LVCR) to the Channel Islands

Thursday, December 15, 2011

The U.K. Government's intention to take action against LVCR on imports to the UK from the Channel Islands was first announced in the March 2011 UK Budget, initially with an impending  reduction in the threshold below which items are imported into the UK free of VAT, from £18 to £15. This new threshold came into effect on 1 November 2011 and applies to commercial goods imported from the Channel Islands until 1 April 2012. On the 29th November in his Autumn Statement, Chancellor George Osbourne confirmed an earlier HM Treasury announcement that from April 1 2012, Low-Value Consignment Relief will no longer be offered to goods exported to the UK market from the Channel Islands.

In response to this announcement, both Jersey and Guernsey governments sought legal opinions on the legality of this action. Whilst continuing negotiations with HM Treasury, the two territories said they would be working with their respective fulfilment industries to assist them with dealing with the impact that such measures will take. A contingent of local businesses have also announced they will be mounting a strong legal challenge in the form of a Judicial review. This review will be presented on the basis that the figures HM Treasury based their decision to exclude the C.I. on have recently been shown to be flawed, and that the decision is discriminatory.

In the meantime though, we would like to take this opportunity to reassure our clients that this declaration does not mean the demise of the fulfilment industry, in fact, Basel eBusiness are already placed to offer alternative solutions for fulfilment operations even if the directive does become a reality.

As this limitation only affects goods imported into the U.K. from the C.I. we are positioned to be able to organise fulfilment operations into the mainland European market from the C.I. (as the majority of European countries still operate the maximum exemption limit of €22). LVCR imports into the UK from other jurisdictions remains in place (ie the relief remains at £15 for products into the UK from centres outside the EU) and we are working closely with our established international network of service providers in this regard. In fact, Basel eBusiness will be jointly presenting at a Swiss Day seminar with Swiss Post and fulfilment providers ProFS, to be held in Zurich on the 18th and 19th January 2012. This seminar will explain the benefits of fulfilling from Switzerland and we will be explaining what the corporate requirements will be to enable this.

To discuss how your online business can continue to take advantage of internet trading with Basel eBusiness Solutions, please call Grant Twine, Managing Director, on +44 (0)1534 500 900, or fill out the form opposite and have us call you.