MPs investigate VAT loophole on imports

Enquiries by optician have revealed that Dollond & Aitchison could be drawn into a debate on a VAT loophole that avoids duty being paid on products, including contact lenses, imported from Jersey.

Another multiple, Specsavers Opticians, has denied exploiting the loophole after it was listed alongside Tesco and Boots Group in press reports last weekend. But D&A does benefit from the Channel Islands' tax laws when it sends contact lenses from Jersey direct to patients on the mainland.

The Forum for Private Business, a pressure group representing private companies, is calling on Chancellor Gordon Brown to close the loophole that allows retailers based outside the EU to sell products under the value of £18 into the UK without attracting duty.

A report in The Sunday Telegraph (January 30) named Specsavers as one of the companies involved. But the Guernsey-based group told optician its contact lenses were supplied to UK patients from UK-registered companies and that none were imported via the Channel Islands.

'All Specsavers practices in the UK are UK-registered companies. The Guernsey-based Specsavers Optical Group provides business services to Specsavers practices, but does not sell products directly to patients in the UK,' it said.

As optician went to press, Treasury minister John Healey was facing questions from members of a sub-committee of the Treasury Select Committee on how companies such as Tesco, Amazon and Boots plc can legally import CDs and DVDs without paying 17.5 per cent VAT.

Select committee chairman Michael Fallon MP said he was concerned that large companies were exploiting a regulation intended to aid small businesses: 'The Treasury needs to wake up ... significant tax revenue is being lost.'

At present, all HM Customs & Excise will say is that the matter is 'under review'. D&A was unable to comment.

rob.moss@rbi.co.uk