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.”