Forum steps up effort to close VAT loophole

A lobby group representing 25,000 UK firms is calling on businesses to back a drive to close a ‘VAT loophole’ used by Channel Islands-based companies selling cut-price contact lenses.

The Forum of Private Business (FPB) has said the loophole allows goods of less than £18 to be individually imported to the UK from the Channel Islands without the imposition of VAT.

However, competing firms who sell goods such as DVDs, health food and contact lenses from UK high streets have no such advantages and many are being driven out of business because ‘they cannot compete with their rivals’ artificially low prices’.

The FPB is leading a campaign for businesses who have been hit in the pocket to join forces and put pressure on chancellor Gordon Brown to take action.