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For ages now, we’ve been able to get our DVDs, games and Blu-rays on-the-cheap from Jersey, thanks to a little tax loophole called LVCR. Of course the government has been clamouring like a fat kid after cup cakes for all that missed tax. Now it’s been given the go-ahead to crush LVCR, meaning discs are going to get pricier from next month.
The LVCR, or Low Value Consignment Relief, has been powering the likes of Play, Amazon, Tesco and others giving us cheap DVDs without tax. Unfortunately it’s also been killing the high street, which simply can’t compete.
Apparently LVCR has been costing the government some £150 million a year in “lost revenue”, but it has also meant we’ve been lining our shelves with DVDs and Blu-rays without burning through our entire pay cheques. Apparently there are talks of shifting businesses to Switzerland, where tax relief still remains, so you might find cheap online DVDs come bouncing back at some point. Then again, when was the last time you actually bought a DVD with the likes of LoveFilm and Netflix around? [The Guardian via TechRadar]
Image credit: DVDs from Shutterstock
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Exactly, I’ve not bought a DVD in years, doesn’t affect me in the slightest
Everyone just needs to place their DVD orders through our resident channel islander woody. The he can do smuggling runs to bring them to the mainland. It’ll be like 30′s Chicago all over again.
I’m coming over in June in the car, I’ll get the boot loaded up with dvds, lol
It’s going to hit us hard here in the Channel Islands… for such a small population we’re going to have a lot of job losses in one hit, several businesses have already closed up shop and made their staff redundant. This ruling also hits local traders, such as our flower growers that export to the UK who have been tarred with the same brush as the big UK companies who used the loophole.
What annoys me is that in the UK, there are individuals getting away with not paying VAT more than the Channel Islands were, such as a cop I read about who didn’t pay something like £200m worth of VAT
Hyperbolc nonsense that completely misses the bigger picture.
The government has not forced DVD prices up. It has forced up the prices of DVDs currently sold using an unintended consequence of a tax law (e.g. a tax avoidance loophole). A government has every right to mitigate against such situations.
And the government is not greedy. It is ensuring that certain retailers charge the normal rate of VAT charged on that sector. One good consequence will be that independent and small retailers in the UK will be able to compete with the global tax avoiders such as Amazon who pay zero UK corporation taxes every year on profits of many hundreds of millions.
The people who are greedy are the ones who choose to buy products which avoid UK taxes. The more the government can raise in consumption taxes (e.g. VAT), the less it needs to raise in payroll taxes (e.g. income tax/NI). Result: you get to decide what you spend more of your hard-earned money on. And that is good for everyone.
Wise words Brother, wise words.
That sucks ):