The government closes the loophole which allows VAT on small goods

The government have announced plans which will stop retailers avoiding paying VAT by procuring goods from the Channel Island. This oversight has been used more frequently by retailers selling CD’s and DVD’s online. This loophole was costing the government £140 million a year. Low Value Consignment Relief (LVCR) will not apply to goods sent from the Channel Island to the UK from the 1st April. LVCR set up for tax exemption purposes for goods coming from outside the European Union so that they could avoid paying small amounts of tax, as collecting it would cost the more.

Kevin Flood, the CEO of Shopow said, “There has been an unprecedented movement of demand from consumers for cheap goods such as CDs and DVDs online, fuelled by the downturn in the economy and lagging disposable income. The closing of the VAT loophole could force British consumers to look further afield for cheap deals.”

Kevin adds, “The closing of the VAT loop hole is good news for traditional British high street retailers such as HMV and Waterstones, who have come under fierce pressure from Channel Island registered online retailers, whose sales models have been taking advantage of the loophole in the VAT rules to offer cut price goods to British consumers. The situation is not at all good however for the run of the mill British consumer, who will quite literally pay the price.”

ENDS-

Editors’ Notes

Shopow is a new revolutionary site that has launched at www.shopow.co.uk. It is the first Social shopping search engine in the UK and is powered by the impartial reviews and experiences of users; allowing them to make an informed choice about their purchases. The visibility for businesses of all sizes gives shoppers access to a greater range of retailers and products than ever before.

Shopow was conceived in October 2009 as the brainchild of Kevin Flood and Mike Harty – two budding entrepreneurs fresh out of university. Both graduated from the University of Leeds with degrees in BA Management and quickly began to use their skills to pursue success in the real world of business.

For more information, images or to book media interviews, contact Flame PR on 07738831362 or email shopow@flamepr.com