March 21, 2012
IT resellers have begun returning to Somerset aside of the closure of the LVCR tax loophole on 1 April.
IJT Direct and Choice Stationery Supplies are among a number of IT resellers to move operations away from the Channel Islands as the deadline to the closure of the Low-Value Consignment Relief (LVCR) tax loophole is set to take effect on 1 April, reports ChannelWeb.
Suppliers and resellers located in the Channel Islands have been able to distribute low-cost products including printer cartridges and memory cards VAT-free to UK customers, which the council for the Treasury and HM Revenue & Customs argued was “abusive and amounted to tax avoidance”.
An attempt to reverse the decision by the government of Jersey and Guernsey failed, although the decision is expected to attract an appeal.
In the wake of the announcement, Choice Stationery Supplies has announced that it has moved all warehousing back to Somerset effective as of March 2012, following operating its ink and toner shipments from Guernsey since 2008.
Bentham Ltd, a Taunton-based cartridge supplier which has been based in the Channel Islands since 2006 and recently suffered a fire at its Somerset factory, has confirmed that it will relocate IJT Direct, one of its businesses, before 1 April.
However Anthony Moxon, owner of Bentham Ltd, has stated he is still considering options for relocating with his more “price-sensitive” businesses that operate through eBay and Amazon: “The HMRC ruling only applies to the Channel Islands and there are a number of alternatives as to where we might ship from, including Switzerland. We are still crunching the numbers on a number of alternatives and watching what everyone else is doing.
“It is relatively easy to HMRC to deal with Channel Islanders. But if Switzerland is a viable option – which I am not saying it is – I’m not sure the Treasury would be comfortable going to war with them.
“We would absolutely prefer to go back to the UK. We are based in Somerset, which gives us some price advantage. But if you are not the least expensive supplier on eBay or Amazon, you will not sell anything. If someone finds a less-expensive route to market, we will have to follow them.”
Categories : Products and Technology