Chancellor expected to close VAT loophole

Chancellor George Osborne is expected to close the low value consignment relief (LVCR) tax loophole used to sell products such as contact lenses via the Channel Islands in the Budget on March 23.

Under the current law, low value items costing less than £18 can be imported from outside the EU without carrying VAT. The Guardian (March 1) highlighted Boots Opticians and Dollond & Aitchison as offering VAT-free prices.

In a report on the BBC website, Conservative peer Lord Lucas said: 'The islands can sell at a price lower than we can buy and that is becoming the case now in areas of cosmetics and of contact lenses.'