HMRC withdraws the Low Value Consignment Relief (LVCR) from April 1, 2012. What you need to know.
VAT-free Under LVCR goods having a value of less than £15 can be imported free of Vat. Many high street retailers have exploited this concession to set up operations (typically in the Channel Islands) to sell mail order Cds, Dvds, books and small items. Although this is good for consumers, it badly hit small independent traders unable to compete with the big boys.
Better for all? Under pressure from small business associations HMRC hs announced that from April 1, 2012 LVCR will no longer be available to goods imported into the UK from the Channel Islands. The government state this will bring increased fairness to businesses, benefit the economy and protect millions in tax revenue. Let's see what happens to the price of Cds etc!
Stage Change At first the government reduced the LVCR threshold from £18 to £15 with effect from November1, 2011 and this applies until April 1, 2012.
VAT TIP The change to LVCR does not affect the existing import reliefs for gifts from outside the EU, including the Channel Islands, which apply to non-commercial consignments eg gifts sent to family members or friends.
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