HMV slams 'idiotic' offshore tax dodging

Christopher Dring
HMV slams 'idiotic' offshore tax dodging

It is ‘absolutely nuts’ online retailers can avoid tax so easily, says HMV.

The Government is closing down the Channel Island tax loophole from April, but HMV CEO Simon Fox says this doesn’t go far enough.

He believes that HMV’s big name online rivals such as Play, The Hut and Amazon could move to other offshore tax havens.

“For many years we have said we would like to see a level playing field,” said Fox.“Unfortunately, the legislation closes down Low Value Consignment Relief [LVCR] only from the Channel Islands. It remains to be seen what our competitors will do, but undoubtedly there’ll be a temptation to go to Switzerland or wherever.

“It can’t be helpful to have your VAT rate as a determinant of where you put your warehouse. It’s a basic distortion to fair competition. The closing of LVCR rules is a good thing, but the way it has been implemented doesn’t necessarily solve anything.

“[The situation] is absolutely nuts. Just as it’s nuts for digital service providers – like iTunes and Amazon Kindle – to be located in low tax locations. 

“Unfortunately, all of the high growth digital markets are not delivering the Government tax revenue. It is absolutely idiotic.”

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Tags: HMV , retailer , simon fox , entertainment , ceo , channel islands , tax , Offshore , Havens , Dodging

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5 comments

what a moron, if he could he would do the same

Paul Arkz

Paul Arkz INDUSTRY
Feb 14th 2012 at 9:43AM

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He does do the same, Paul. HMV's website is based offshore. But the position of the retailer is that everyone should compete on an equal footing.

Personally, I think it's ridiculous that online retailers order stock in the UK, ship it out of the UK, only to send it back to the UK. Think of the environment.

Christopher Dring

Christopher Dring MCV STAFF
Feb 14th 2012 at 9:47AM

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hypocrite - hmv.co.uk was based in the channel islands AND registered as a seperate business! Yet more insane babble from Simon Fox who last week condemned the results which showed Amazon as the leading entertainment retailer on the strength of games (which his company "retails" - if you could call their offering retailing) & has babbled for 2 years about how HMV will remain. Well, ultimately when you run your share price to as low as 2p the reality is you shouldn't be around to babble like this - yes i do agree the loophole should have been closed long before now, but to bemoan something you benefit from shows a shocking lack of creditability!

Allan Mounce

Allan Mounce ELITE GAMER
Feb 14th 2012 at 11:23AM

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I have to disagree with you there Allan. HMV have always been against the tax loophole, even when they opened their online operation out there. They pretty much had to do it to stand a chance of competing with Play/Amazon etc.

In an ideal world, HMV would rather have opened in the UK. It's what Simon said in our full interview, which you can read in the magazine and goes up online shortly.

Christopher Dring

Christopher Dring MCV STAFF
Feb 14th 2012 at 11:28AM

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Its good to see HMV finally admit publicly that this nonsense has to end. Simon Fox and HMV should do what they should have done a long time ago and get behind RAVAS and ensure that the abuse of LVCR is ended. Its not LVCR that is the problem but the circular shipping of UK and EU products to a non EU location to abuse LVCR. This behaviour should have been stopped a long time ago as its illegal and always has been. The only reason its continued is because the UK has allowed it contra to their obligations under EU law to stop LVCR being used for tax avoidance. Hopefully this will all come out in the Channel Islands Judicial Review. We urge HMV to do the right thing and push to have LVCR abuse outlawed no matter where it occurs. All UK retail both online and high street has been suffering from a tax avoidance led market distortion for 15 years. It must end now.

Richard Allen RAVAS

Richard Allen

Richard Allen INDUSTRY
Feb 15th 2012 at 10:01AM

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