10 February 2012 Last updated at 14:09 ET

Guernsey and Jersey tax relief legal cases set for March

Island companies are unsure whether they will need to leave if the cases are unsuccessful

Two legal challenges against the ending of a tax relief agreement between the UK and the Channel Islands are due to be heard in mid-March.

The Administrative Court at the High Court is due to hear the case.

They were launched after the UK announced an end of Low Value Consignment Relief for the Channel Islands in April.

The governments of both Guernsey and Jersey are arguing it discriminates against businesses in the islands.

The UK government has said it aimed to put a stop to companies who moved to the island to sell goods valued under £15 VAT free.

However, as the change only affects the Channel Islands and not other non-EU territories the island's governments have suggested it is discriminatory.