Paymaster General Dawn Primarolo says that the action taken by Economic Development Minister Philip Ozouf to close down UK firms using Jersey as a postbox to avoid VAT was disappointing, and too small a step.
She told MPs yesterday that if the States do not take steps to control the fulfilment industry, then the UK government will step in.
Jersey’s fulfilment industry works by exporting things like CDs and DVDs under the Lower Value Consignment Relief of £18 below which VAT is not charged.
The relief allows companies like play.com to escape VAT and undercut the UK high street.
Yesterday, in a Westminster Hall Private Members Debate sparked by Jim Sheridan, MP – who told the Commons that Channel Island firms were costing the UK taxman £85m per year in lost VAT revenue – Mrs Primarolo said that if Jersey does not take effective action on the fulfilment firms, then the UK Treasury will.
