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The Forum of
Private Business (FPB) is calling on MPs to sign up to an Early Day Motion
calling for an end to a VAT loophole that is pushing small retailers to the
wall.
The forum claims that firms that sell goods such as DVDs and CDs from UK high
street shops are being driven out of business simply because they cannot compete
with their larger rivals' low prices.
The FPB represents around 25,000 small and medium-sized firms in the UK and is
campaigning for action to effectively close the loophole, which has been
exploited by retail giants such as Amazon, HMV and Tesco.
The loophole allows individual goods with a value of less than £18 to be
imported to the UK from the Channel Islands without the imposition of VAT.
Smaller retailers are struggling to compete with these artificially-low prices
and the country is missing out on millions of pounds in revenue.
Chief Executive of the FPB, Nick Goulding, stated: “There is a growing list of
politicians supporting this Early Day Motion.
"The Government, which is aware of the problem, has paid only lip service to it,
meanwhile it is costing many owners of small firms their livelihoods, which is
why we are trying to bring about more debate in Parliament.”
Although The Chancellor promised to look into the issue in his March 2006 Budget
speech, any evidence of action has yet to be seen.
As a result, the FPB is urging MPs to sign up to the EDM put forward by Andrew
Love MP, Chairman of the All-Party Parliamentary Small Business Group (APPSBG).
The loophole already costs the British Government £80 million in lost revenue, a
figure that is predicted to rise to £200 million over the next few years.
Independent retailers representing more than 100 outlets have already signed up
to an open letter to government calling for the loophole to be closed by
lowering the threshold on goods that can be imported without VAT from £18 to £7.
Mr Goulding believes that it would draw a line under proceedings.
He added: “What we have seen is many larger retailers relocating operations to
the Channel Islands, importing goods from the UK and then exporting them back to
the mainland to take advantage of this loophole.
"If the threshold were lowered, they would no longer be able to do that.”
Source:
Credit
Control Journal
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