You would have to live on another planet (or at least Island) not to be aware of the challenges facing the local fulfilment sector at the moment. Based on incomplete and dubious evidence the UK government has announced highly discriminatory measures aimed at closing the industry in the Islands. This is in the naive belief that the trade will move to the UK mainland befitting small business and generating additional VAT of circa £100 million without any extra costs. The reality of course is that it will do nothing of the sort. All of this is very concerning for the thousand or so Islanders who make their living directly out of the industry and equally bad news for the rest of us who benefit indirectly from the sector’s activities.
Following the publication of the draft legislation a number of local companies are considering whether they should take legal action against the UK government. Advice I have seen certainly indicates they would have a strong case. Of course litigation is expensive and slow but the stakes are high and the UK action is blatantly unfair, so there is probably little choice.
All this does not seem to be much of a reward for the cooperation Jersey has given in removing the companies who actually were abusing LVCR back in 2006. Cooperation that continues today. For example, working with their customers, Jersey Post collects around £5 million of VAT on behalf of HMRC each year (free of charge!). Quite a bit better than our competitors in Hong Kong, who according to the UK Government’s own figures managed to raise just £5,000 over the same period! Yes that’s right £5,000!
The basis for the UK action is the claim that most imports benefiting from low value consignment relief come from the Channel Islands and distort competition in every product sector. Again from what I have seen this seems to be based on highly dubious and incomplete information and even if it was right, it will just mean that companies based in places like Switzerland, Hong Kong and Chicago will take the business, creating zero benefit for the UK.
From what I can see our Government is doing all it can. In reality it is up to the industry to work together to fight this. Other sectors would do well to reflect on what might be next if the UK government gets away with it though.
Kevin Keen Jersey Post
It’s testament to the commitment of a locally-owned development company, Le Masuriers Limited, that the approval of J1, their major scheme in the town centre, doesn’t mean their plans for their Bath Street scheme have been put on hold.
Over Christmas, I read up on the business benefits of corporate social responsibility or putting it another way being moral in business (exciting times!).
As you are probably aware, Social Security rules have changed this year for employers of staff earning more than £3,778 per month (equivalent to £45,336 per year).