Channel Islands lose low value tax relief

Internet sellers of contact lenses in the Channel Islands have learnt they will be stripped of a VAT loophole from next year as part of legislation feared to risk job losses.

The UK government has decided to remove low value consignment relief (LVCR) for goods imported from the islands.

An influx of retailers selling low-value goods such as contact lenses, CDs, DVDs and memory cards has resulted in a growing fulfilment industry in the region, with 700 employed in Jersey and 600 in Guernsey.

Local businesses and politicians were fearful the policy change would impact jobs. However, Ronald Hamilton, whose Daysoft business sells contact lenses from Jersey, remained buoyant. 'When there is fog over the English Channel we just proceed with caution,' he said. 'We are very optimistic about our business model and expect that sales and head count will increase again in 2012, regardless of what the UK government thinks up.'