Guernsey

Guernsey and Jersey will not appeal against VAT decision

  • 2 April 2012
  • From the section Guernsey

The governments of Guernsey and Jersey will not appeal over the UK High Court decision that upheld ending Low Value Consignment Relief for the islands.

A statement from the Policy Council said it had considered the financial, economic and legal costs of appealing.

Senator Alan Maclean, Jersey's Economic Development Minister, said the likely time-frame for appealing was too long.

Low Value Consignment Relief had allowed companies to send low value goods to the UK without paying VAT.

For the Channel Islands the relief ended at the weekend, but remains in place for all other non-European Union areas.

HM Treasury ended the relief as it said the UK had been losing millions of pounds in revenue.

Senator Maclean explained his government had been advised an appeal would likely be referred to the European Court of Justice.

He said a decision from the court could take between 18 months and two years to reach.

He added this would be too long to have an effect on local businesses.

Deputy Carla McNulty Bauer, Guernsey's Commerce and Employment Minister, said the decision to not appeal was made after "an in-depth evaluation of the judgement".

She said: "The Policy Council felt that seeking an appeal was not in the islands' or businesses' long term interests."

A number of fulfilment companies announced the closure of warehouses and the laying off of staff in the wake of the High Court decision in March.

Senator Maclean said efforts would now be focussed on meeting people from the fulfilment industry to discuss support and answer any questions.

The judgement passed by the High Court stipulated the islands would collectively pay for half of the UK's legal fees from the case.

It has not yet been confirmed what these costs will be.

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