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Pressure mounts on VAT loophole

According to BBC reports, pressure group the Forum for Private Business has prompted more then 100 small and medium-sized firms to write to the Treasury insisting that the current law, which allows for the VAT-free sale of imported goods under £18, is being exploited by larger businesses able to set up a distribution operation on islands like Jersey.

The latest demand is to reduce the threshold to around £6.80, which would stop the larger chains from selling entertainment product several pounds cheaper than those without a Jersey or Channel Islands-based distribution set-up.

“Firms that sell from UK High Streets have no such advantages and many are being driven out of business simply because they cannot compete with their rivals’ artificially low prices,” FPB chief executive Nick Goulding told the BBC. “In simple terms all retailers want, surely not unreasonably, is for the re-introduction of a level playing field.”

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