TaxCorporate TaxJersey business owners claim victory in VAT ruling

Jersey business owners claim victory in VAT ruling

Legal ruling agains retailer may see closure of VAT loophole

A ruling by the European Court of Justice against UK optician and eyewear
retailer Dollond & Aitchison has been hailed as a victory for Jersey’s
owner-managed businesses in their fight against retail giants.

D&A and other major retailers such as Tesco, HMV and Amazon, use the
British-owned island as a sales base, taking advantage of a tax loophole where
goods worth less than £18 and sold on Jersey are exempt from VAT.

Small retailers on the island say they cannot compete with the major
retailers because of them exploiting the tax loophole, the FT
reported.

In the case of D&A, the ECJ ruled that the cost of eye tests must be
factored into a lens package, pushing their value over the £18 cut-off.

Forum of Private Business chief executive Nick Goulding said his organization
believed the practice was an abuse of the tax system and that it was time the
government took decisive action to stop it.

‘It should not be forgotten the government is losing £80m in unclaimed VAT,’
he added.

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