CD sales loophole could be closed

Jersey's government could close a tax loophole for new UK firms trying to sell cheaper music and films.

Some major supermarket groups and other retailers have been selling cut-price CDs through mail order based in the Channel Islands.

But this could change for new firms under new rules planned by leaders in Jersey, according to reports.

Senator Frank Walker, president of the island's policy committee, said the loophole was unwelcoming and damaging.

He told the Sunday Telegraph that in future, licences would only be given to UK firms that have a "legitimate operation" on the island. This would not affect licences that have already been granted.

Under European law, retailers that operate outside the EU can sell products valued at less than £18 to customers in member states without charging VAT.