Channel Islands going to court to save LVCR
The governments of Guernsey and Jersey are taking the UK government to court in an attempt to save tax exemption Low Value Consignment Relief.
LVCR is due to come to an end in April, putting nearly 2,000 jobs across the Channel Islands in doubt.
Channel Television can reveal lawyers representing each island will be taking their cases to the English courts to argue the move is discriminatory and a breach of European law.
The Channel Islands were taken by surprise in October when the UK Treasury announced its intention to end Low Value Consignment Relief, or LVCR, which means goods worth less than £15 (formerly, £18) posted from the Channel Islands to the UK can be sent VAT-free.
That is set to end in April putting up to 2,000 jobs in the fulfilment industry at risk.
Today the States of Guernsey have announced their intention to mount a legal fight with the UK government, the States of Jersey doing the same thing simultaneously.
The argument goes that the UK government has applied EU law improperly by specifically targeting just the Channel Islands with its LVCR announcement.
Guernsey's Chief Minister Deputy Lyndon Trott said: "All Channel Islanders should receive the news that the governments in both Guernsey and Jersey are eager to ensure that our businesses and our communities are not discriminated against. And it is on that basis that this challenge is being made."
Law officers from both islands will be taking their case to court. Each case is likely to cost around £60,000, could be concluded by February, and our sources tell us law officers for the Crown in Guernsey believe there is a better than 50% chance of success.
Lawyers may also want to correct the claim by the UK Treasury that 75% of all VAT losses come from the Channel Islands fulfilment industry. That is strongly denied by both island governments.
Today's development is being backed by the fulfilment industry.
Derek Coates, Chief executive of Guernsey-based Healthspan, said: "I welcome this announcement from Guernsey's Chief Minister. I will await the outcome of the judicial review before making any further comment."