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Review ordered to protect Jersey’s fulfillment sector

Wednesday, June 29th, 2011

The impact of current and future market conditions upon Jersey Post will be officially reviewed in a bid to protect the island’s mail-order industry.

Jersey’s economic development minister Senator Alan Maclean commissioned the investigation, to be led by the Jersey Competition Regulatory Authority (JCRA), stating that there remains “a material risk that the UK Treasury and the EU will take action that could threaten the sustainability of the sector in its current form”.

The Channel Island’s fulfillment industry has come under threat after UK Chancellor of the Exchequer George Osborne reduced the VAT Low Value Consignment Relief (LVCR) from £18 to £15, effective from November.

Furthermore, the UK and the EU has indicated that the benchmark could be lowered even further in the future, or eventually removed.

As it stands, Jersey’s fulfillment industry can export products like CDs and DVDs into EU countries without paying a sales tax, undercutting the high street where VAT is charged.

If such products became tax payable, it would threaten the financial viability of Jersey’s fulfillment industry. This in turn would lead to a “significant loss of revenue” to Jersey Post.

Senator Maclean also said the JCRA are not to award new postal licences in Jersey until the review is complete.

Source: Post&Parcel

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