21 March 2007
In documents published following today’s budget speech, the Chancellor of the Exchequer announced that recent actions by the Channel Islands authorities in the CD/DVD sector, and a recent commitment from the States of Jersey authorities to continue to address issues related to Value Added Tax (VAT) losses resulting from Low Value Consignment Relief (LVCR), had been viewed very positively by the UK Treasury.
At the invitation of the UK Treasury, representatives of the Economic Development Department have met UK Government officials on a regular basis to address concerns about the loss of UK VAT resulting from fulfilment activity in Jersey. In the course of these meetings HM Treasury officials have made it clear that the constructive approach taken by the States of Jersey, including the ongoing implementation of the current fulfilment policy, has proven instrumental in the Treasury’s decision not to legislate to prevent further VAT losses at this time.
The Economic Development Department (EDD) has developed policy in the fulfilment sector to preserve the significant levels of employment and GVA contribution made by companies in the sector. The policy, implemented in February 2006, encouraged the further development of the sector through Jersey owned whole chain companies whilst limiting the Island’s exposure to large UK retailers utilising third party suppliers to deliver CDs and DVDs in to the UK.
Economic Development Minister, Senator Philip Ozouf stated, “This is a new global industry which has developed in Jersey following the rapid emergence of on-line retailing over the World Wide Web. On-line retailing is becoming an increasingly important part of day-to-day life in Jersey, the UK and across the globe. However, as with all new innovations, careful thought and detailed planning is required by the Economic Development Department to ensure that the sector develops positively, without unacceptable damage to others. I am pleased that Jersey continues to play an active role in the high-level negotiations that secure the Island’s position in this evolving market. By doing so, we will safeguard Jersey’s own interests as well as fulfilling our international obligations.
We are confident that our discussions with the UK Treasury are progressing well and that we will succeed in establishing a framework for the future which is acceptable to the Treasury and to ourselves.”
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Notes to Editors:
1. For further information, please contact
Mike King on Tel: 07797771914
2. The following is an extract from the supporting material to the Chancellor's speech:
The Government has monitored closely exploitation of the relief by companies making VAT-free supplies from outside the EU, particularly from the Channel Islands. It notes the action already taken by the authorities there to counter such exploitation. It welcomes the commitment made by the Jersey authorities, in discussions with the Government, to limit the activities of companies continuing to operate on the Island, with the associated revenue loss to the Exchequer. The Government remains in discussion with the Guernsey authorities on this issue. It hopes that they will shortly be in a position to make a similar commitment. The Government will continue to keep the situation under close review.
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