Sunday, April 15, 2012

UK Retailers against VAT abuse: notes on a victory

We have blogged on efforts by Retailers against VAT Abuse (Ravas,) a retail industry body campaigning against a loophole that has allowed some operators to kill their competitors by escaping Value Added Tax (VAT) through the UK Channel Islands. For those interested in the issue, they have now written a long report on the issue (and the court judgement in their favour is here).

We will merely point out a couple of things from the article:
David Greene, a partner at Edwin Coe, who represented RAVAS, summed up the final ruling in a statement to the Guardian ”RAVAS and its members have been campaigning for the past 10 years to abolish the loophole that allows retailers based in Jersey and Guernsey to avoid VAT on low value goods ordered over the internet by UK consumers. As a result of RAVAS’s pleas to the European commission, the UK government clamped down on this abuse. UK retailers have been seeking an even playing field but have been competing with supplies from the Channel Islands with one hand tied behind their back.”
Note the sentence in italics (that's our emphasis.) In other words, the UK government has been allowing this abusive market distortion to continue unperturbed for years, and it only clamped down when the European Commission (prompted by Ravas) clamped down on it.

One more to add to the UK's supremely crowded hall of shame in international tax.


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