Call to stop mail order tax break

A UK pressure group is calling for a tax-free mail order system operating on Guernsey to be scrapped.

The Forum of Private Business wants to stop retailers using the Channel Islands to sell goods under £18 VAT-free over the internet.

The group said all businesses needed to "compete on a level playing field".

The States of Guernsey has pledged to stop new mail order companies moving to the island but said existing businesses will be allowed to continue.

Operating offshore

Jersey announced this week that licences for internet and mail-order businesses would be stopped in a year.

Stores, including Tesco and Asda, had moved internet operations to Jersey to avoid UK VAT on CDs and DVDs.

Under EU law, retailers operating out of the EU, as in the Bailiwick of Guernsey, can sell products valued at less than £18 to customers in member states without charging VAT.

The UK Treasury is losing £80m a year from retailers operating "offshore", a Parliamentary debate revealed last month.