VAT campaign is taken to HM Customs' door

HM Revenue & Customs was told directly that Britain's optical independents and other high-street shops are being endangered by the Channel Islands' VAT status yesterday (August 25). 

The Forum of Private Business - which has several optician members 'up in arms' because some groups are importing cut-price contact lenses from Jersey - took its campaign against the practice to a specially arranged meeting with the Government's HM Revenue & Customs.

'We will be telling HM Customs that high-street shops are being fatally undermined by this anti-competitive and deeply cynical tax dodge, as they cannot compete on price,' the Forum's chief executive, Nick Goulding, told optician before the meeting.

'The loophole needs to be closed so independent shops can compete on a level playing field. We must not forget that we have lost 20,000 high-street shops since 1997 and 41 per cent of our high streets are now described as clone towns.'

This week the Forum singled out multiple Dollond & Aitchison as one of the retail giants at fault, as the company sells monthly contact lenses for £20, with the package at £14.99 if bought via its Jersey site.

Jersey's Government said earlier this year it would allow no further UK-based retail giants to establish themselves on the island, but Goulding said that he would stress to Customs that this concession was of limited use.

'Jersey is talking tough, but in reality its supposed clampdown amounts to locking the stable door after the horse has bolted,' he said. 'The majority of retailers are already based on the island and this will not affect their trading.
'Moreover, Guernsey has made no commitment to clamp down on the industry.

'Therefore, unless the Government acts swiftly, this sore will continue to fester and small businesses will go to the wall.'
The Forum is suggesting two possible solutions to the Treasury, said a spokesman.

'The Treasury could kill the industry dead by lowering the price level on goods which VAT is exempt from, from Û22 to Û10 - about £7. This would render the trade unprofitable.

'Secondly, the Treasury could ask permission from the EU for a special dispensation to close the loophole. This is a more drawn-out process but a similar dispensation has been granted to the Danish Government.'

Formed 28 years ago, the Forum of Private Business is a pressure group working on behalf of 25,000 UK businesses.