Internet contact lens prices have already risen as a result of the removal of the VAT loophole created by the low value consignment relief (LVCR) from April 1.
In 1983 LVCR was introduced to speed up deliveries from firms outside the EU of small items and prevent time and money being wasted by the tax authorities. A boom in internet shopping has seen a fulfilment industry spring up in the Channel Islands based around CDs, memory cards, spectacles, contact lenses and other items.
The Chancellor announced the scrapping of LVCR on goods shipped from outside the EU last year following pressure from UK-based retailers and a subsequent appeal was rejected in London's High Court last week (News 23.03.12).
Daysoft, which delivers contact lenses from the region, had warned its customers about the likelihood of a rise in prices if LVCR was removed. It announced a £1 a box increase last week. Executive chairman Ron Hamilton said: 'We are baffled at the apparent willingness of the UK government to tolerate sales by UK-based suppliers of foreign made contact lenses into the UK without charging VAT while clamping down on Channel Island suppliers.'
He described the situation as a mess. 'There appears to be, to put it kindly, double standards at work as there also appears to be by the GOC by ignoring prescription verification by these self-same suppliers.'
A statement from Boots said: 'A small number of our contact lens supplies will be affected by these changes, however, any additional costs will be absorbed by Boots Opticians. There will be no impact on the amount our customers pay for their contact lenses.'
Up to 1,000 jobs are linked to the fulfilment business in the Islands and the States of Jersey is reported to have earmarked £7m to help any workers affected. Concerns have been expressed that the fulfilment businesses will relocate. While the UK has scrapped LVCR, sales into other European countries still benefit from the relief.