A hint: illegal is not a synonym for something Ritchie disapproves of.
So, on low value consignment relief for VAT we get this from the Telegraph.
Up until now, the UK government was concerned about facing possible legal action if it attempted to stop the likes of Amazon, HMV and Play.com from exploiting a legal tax loophole that enabled them to ship goods to the Channels Islands and then back to UK customers minus the cost of VAT.
The EU has now given assurance to the treasury that it is perfectly within its rights to abolish the \”abusive and restrictive\” trade.
A change to the law that would see an end to the multi-million pound Channel Islands industry could be enacted as early as this autumn.
As background, you need to know that LCVR is part of European law: the UK can independently vary the amount to which it applies, but not the existence of LVCR itself.
At least, that\’s what we all thought until this bit of EU clarification.
Note that we\’re not told what the clarification is as yet but this is not the major point. That major point is, look see, \”A change to the law\”.
Keep that in mind.
Having quoted the above R. Murphy Esq, one of the country\’s leading tax experts, tells us that:
So, now we know: this abuse is illegal and can be stopped without fear of legal challenge or claim for compensation against the UK arising.
Err, no. This \”abuse\” is not illegal. That\’s why the law has to be changed so as to make it illegal.
Remember: illegal is not a synonym for things that Ritchie disapproves of.
This next part is simply hilarious. For Ritchie is, as we all know, also one of the country\’s leading economists. Isn\’t he?
And what will he spend the £200 million or so a year he will collect on? Youth services, maybe? Wouldn’t that seem just?
So when will we see action from George Osborne to stop tax abuse, end tax haven activity, support the UK High Street, maintain UK jobs and ensure that the valuable role of UK music shops in offering diversity to consumers is upheld? And what will he spend the £200 million or so a year he will collect on? Youth services, maybe? Wouldn’t that seem just?
What £200 million?
We can say that consumers are not paying £200 million in VAT by buying through the Channel Islands (rather an over-estimate I would have thought but still…), yes. But that does not mean that consumers will now pay £200 million more in VAT as a result of not being able to buy through the Channel Islands.
The complete abolition of LVCR will mean the end of the Channel Island trade, I think that\’s reasonably clear. So there\’s not going to be any revenue collected by the Post Office then.
And consumers will now face a 20% price rise on their purchases of DVDs, ink jet cartridges and all the rest. So a question to one of the country\’s leading economists. Demand curves: upward sloping? Downward? Flat?
Quite, the general assumption is that they\’re downward sloping, isn\’t it? So sales of these items will fall (by some unknown amount) and the tax collected will not be the same as the tax previously \”lost\”.
What £200 million?