7dayshop in trouble as government close LVCR loophole :(

bomberman

bomberman

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I've just been on the 7dayshop website and noticed how expensive everything is on there now compared to what it used to be, so i did a little search and found this:

http://m.bbc.co.uk/news/world-europe-jersey-17563620

It seems the Tory moneygrabbing posh boys have closed the LVCR loophole, which means items under £15 sent from Jersey and the Channel Islands are no longer tax-free.

This has a direct impact on us, as a roll of film from our favourite online dealer now costs £5 instead of £3.50, and a sandisk ultra 4gb CF card is now £14.35 instead of just over £12. The irony is that it will cost the government 7 million pounds in benefits handouts from job losses - money that could be spent keeping people in work and people like us buying from excellent companies like 7dayshop.

As if this country needs any more job losses. VOTE WITH YOUR FEET PEOPLE!
 
Not sure I could manage to draw an X with either of my feet.
 
fabs said:
How does a couple of quid on film and CF cards cause job losses costing £7m in benefits?
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From the link he posted

The Jersey and Guernsey governments said hundreds of jobs across both islands were at risk.

LVCR meant no VAT was charged on goods under £15, such as CDs, when sent to the UK from outside of the European Union.

Senator Maclean said his department was doing all it could to protect that part of Jersey's economy.

In Guernsey, HMV announced it was closing its fulfilment warehouse putting 46 employees at risk of redundancy.

There were 26 job losses announced at Healthspan and about 30 at 7dayshop.com.

Guernsey Post said it would be increasing stamp prices to reduce the impact of the loss of LVCR.

Boley Smillie, chief executive of Guernsey Post, said: "To put the price increase into perspective, the loss of LVCR will reduce our profit by £3.7m over the next 12 months."
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I presume the job losses equates to his figure.
 
from the links at the bottom of the page to other related articles. AKA "The news"

Oh i see what you're asking. Well now 7dayshop has a lot more competition from the likes of other online retailers like amazon and ebay people will just shop there instead, meaning losses in profits and predicted job cuts. It's not just 7dayshop that will suffer, it's all the mail order retailers that have grown on the channel islands as a direct result of the loophole. It's going to cost the government 7 million to support those people,
 
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fabs said:
Was wondering where the £7m was coming from though.
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Another BBC link
http://m.bbc.co.uk/

States of Jersey puts aside £7m for LVCR job losses
20 March 2012 Last updated at 14:56

Hundreds of jobs are thought to be at risk due to the ending of LVCR by the UK government
More than £7m has been put aside by the States to help mail order industry workers in Jersey.

Hundreds of jobs are thought to be at risk due to the end of an agreement allowing Channel Island companies to sell goods tax-free to UK customers.

It is thought every 100 people who lose their job will cost Jersey's government about £800,000.
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fabs said:
Was wondering where the £7m was coming from though.
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just in that article theres 102 (potential) job losses. Say each one is out of work on average 12 months. Thats about £5k tax plus another £2.5k ni each on average (so £750,000 k) in tax for a year alone, plus maybe the same in benefits, (£1.5m for the 102 people mentioned) - it's not an unreasonable leap to assume many more people, either directly are affected and not mentioned, or indirectly (either locally or else where in th UK), so assuming that article is correct then its quite easy to see how that mounts up.

Of course that doesn't include potential lost revenue to the companies and so HMRC ultimatley, which is kind of hard to predict.

Of course thsis needs to be offset against any increased VAT take, but who is to predict that
 
boyfalldown said:
just in that article theres 102 (potential) job losses. Say each one is out of work on average 12 months. Thats about £5k tax plus another £2.5k ni each on average (so £750,000 k) in tax for a year alone, plus maybe the same in benefits, (£1.5m for the 102 people mentioned) - it's not an unreasonable leap to assume many more people, either directly are affected and not mentioned, or indirectly (either locally or else where in th UK), so assuming that article is correct then its quite easy to see how that mounts up.

Of course that doesn't include potential lost revenue to the companies and so HMRC ultimatley, which is kind of hard to predict.

Of course thsis needs to be offset against any increased VAT take, but who is to predict that
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Ah, so it's a worst case scenario rather than "will cost" then.
 
fabs said:
Ah, so it's a worst case scenario rather than "will cost" then.
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I'd read it as that, but I think these things get so complicated, so quickly its hard to do much more then best guess
 
bomberman said:
I've just been on the 7dayshop website and noticed how expensive everything is on there now compared to what it used to be, so i did a little search and found this:

http://m.bbc.co.uk/news/world-europe-jersey-17563620

It seems the Tory moneygrabbing posh boys have closed the LVCR loophole, which means items under £15 sent from Jersey and the Channel Islands are no longer tax-free.

This has a direct impact on us, as a roll of film from our favourite online dealer now costs £5 instead of £3.50, and a sandisk ultra 4gb CF card is now £14.35 instead of just over £12. The irony is that it will cost the government 7 million pounds in benefits handouts from job losses - money that could be spent keeping people in work and people like us buying from excellent companies like 7dayshop.

As if this country needs any more job losses. VOTE WITH YOUR FEET PEOPLE!
Click to expand...


Ohhh come on you don't think the government will let us public have a little break, a little loophole to ease our lives a bit were we normally get hammered this way and that on taxes do you...:nono:

Anyway they will need the money for their second homes with state of the art birdhouses costing tens of thousands that we will all be paying for :wave:

:thumbsdown:
 
bomberman said:
As if this country needs any more job losses. VOTE WITH YOUR FEET PEOPLE!
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Excellent idea. This country would be a lot better off if everybody who thought avoiding tax was a good idea would vote with their feet. They can all go to another country and not be missed at all.
 
People will just buy from further afield such as hong kong.
The low value exemption has not been removed from non European countries.
 
bomberman said:
As if this country needs any more job losses. VOTE WITH YOUR FEET PEOPLE!
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Did I miss something, what are you asking people to actually do? - leave the country?

By the way, this was news to you? It's been discussed on the forum several months ago when the change was announced. You didn't stock up in anticipation?
 
TheCrewDesigns said:
Ohhh come on you don't think the government will let us public have a little break, a little loophole to ease our lives a bit were we normally get hammered this way and that on taxes do you...:nono:

Anyway they will need the money for their second homes with state of the art birdhouses costing tens of thousands that we will all be paying for :wave:

:thumbsdown:
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Exactly. By "vote with your feet" i meant vote for another party, not leave the country!

And yeah....politics. affects us all unfortunately!
 
Can't get too worked up about this, especially when a mainland company such as Premier Inks seems able to have good prices and the kind of delivery that 7dayshop could never manage. More interesting is the blog entry from Tim Waterstone saying that Amazon apparently don't pay corporation tax on a £3.3billion turnover and I'm guessing that's way more money than 7dayshop ever dodged. :thinking:

http://www.dailymail.co.uk/news/art...s-book-industry-claims-Waterstones-chief.html
 
Peter B said:
Can't get too worked up about this, especially when a mainland company such as Premier Inks seems able to have good prices and the kind of delivery that 7dayshop could never manage. More interesting is the blog entry from Tim Waterstone saying that Amazon apparently don't pay corporation tax on a £3.3billion turnover and I'm guessing that's way more money than 7dayshop ever dodged. :thinking:

http://www.dailymail.co.uk/news/art...s-book-industry-claims-Waterstones-chief.html
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No reason why Amazon should pay corporation Tax. it is based in Luxembourg.
However. there is no reason why the tax law could not be changed, though it would upset some international giants.
Private individuals have to pay british tax where ever their earnings are made, corporations could be treated the same, especially as regards earnings and sales derived from the UK.
 
Terrywoodenpic said:
No reason why Amazon should pay corporation Tax. it is based in Luxembourg.
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With Amazon under investigation in both the US and the UK for potential tax liabilities it's a little too soon to say that.

There needs to be a change made to get around these head office of convenience coproration tax deals.

I don't think this will stop me using 7DS but I'll probably shop around a bit more. It will hit the HMV/Tesco/etc type of offshore operations more than 7DS I imagine. 7DS has an intrinsic connection to the islands whereas HMV/Tesco/etc purely set-up parallel operations to exploit the loophole.
 
From a business owners point of view, anything that evens the playing field with mainland companies is a good thing.

It means the companies will have to work harder and prove they are a company worth dealing with, rather than just relying on a tax loophole (that was never intended to be used in the way it has been) to be a successful business.

Customer service and efficiency have just become more important.

May the best companies survive.
 
I would prefer to see a level playing field for ALL retailers big and small. The tax loophole favours the big companies that have the funds to set up a branch in the channel islands but a smaller trader would not always be able to do this.
 
PsiFox said:
From a business owners point of view, anything that evens the playing field with mainland companies is a good thing.

It means the companies will have to work harder and prove they are a company worth dealing with, rather than just relying on a tax loophole (that was never intended to be used in the way it has been) to be a successful business.

Customer service and efficiency have just become more important.

May the best companies survive.
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Absolutely. Couldn't agree more.
 
dont see why the companies find it a chore as they can claim the tax back. If they want to keep customers, they could try being more competitive and stop trying to shaft customers all the time.

as for the political angle...well we could always see if we can find a chancellor who has a degree in economics, that would stop them doing anything stupid like borrowing too much money we can afford to pay back or selling all the countries cold reserves while the value is at its very lowest..
 
matty said:
selling all the countries cold reserves while the value is at its very lowest..
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Will climate change see a rise in the value of cold futures?
 
bomberman said:
The irony is that it will cost the government 7 million pounds in benefits handouts from job losses -
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The tax that just one government advisor avoided in just one year (£285 million) would have covered that for the next 40 years......
 
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