23 March 2011
The Minister for Economic Development, Senator Alan Maclean, plans to consult Jersey’s online retail sector following today’s UK Budget speech to assess the impact of the proposed changes in Low Value Consignment Relief.
The Chancellor of the Exchequer announced a reduction in the Low Value Consignment Relief threshold to £15 and a full review of the relief in the Budget Speech.
At the moment, goods imported into the UK from any non-EU country with a value of less than £18, do not attract UK VAT, currently set at 20%. This relief applies to products from all non-EU jurisdictions, including the USA and Asia.
The Chancellor’s announcement reduces the threshold level at which VAT will be levied from £18 to £15 with effect from November 2011.
Senator Maclean said that, while Jersey would cooperate fully with the review, EDD officers will contact HM Treasury officials to discuss the impact of the proposed reduction in threshold on the Island’s online retail sector.
Senator Maclean commented “The UK media have incorrectly stated that the Channel Island’s online retail sector is in some way responsible for the demise of UK high street shops. In fact online sales of products like DVDs and CDs only account for a small proportion of the overall UK market, with the vast proportion sold through UK supermarkets and other UK retail outlets.
“The UK Treasury’s review of LVCR will give Jersey the opportunity to counter unfounded criticism of our online retail industry. EDD has worked closely with the sector and the UK Treasury to eliminate abuse of LVCR. HM Treasury has recognised Jersey’s efforts in public statements made by UK Ministers.
“Online sales are an important part of Jersey’s e-commerce sector. Its companies employ up to 1000 people, the majority of whom are locally qualified, and this business produces significant revenue for Jersey Post and other postal operators. I am determined to minimise the impact of the UK Government’s announcement and ensure that legitimate Jersey businesses can continue to trade profitably.”