VAT loophole may be closed

Online contact lens retailers operating from The Channel Islands have been warned that a narrowing VAT tax loophole on smaller orders could soon close.

According to a report by The Daily Telegraph (August 3), the EU has given the UK government 'assurances' it can abolish Low Value Consignment Relief (LVCR) loophole. LVCR has allowed retailers to sell goods under £18 into the UK without charging VAT, by shipping them via the Channel Islands. It has been used mainly by large online CD and DVD outlets, and online contact lens sellers.

Chancellor George Osborne lowered the threshold for LVCR to £15 in his March Budget, but stopped short of abolishing the loophole.