Guernsey and Jersey legal costs over LVCR revealed

The Channel Islands will have to pay £70,000 in legal costs to the UK Government after a failed appeal against the end of a tax relief.

Guernsey and Jersey lost a legal challenge in March 2012 after the UK Treasury announced it would be ending Low Value Consignment Relief (LVCR).

The islands were ordered to pay the UK's legal costs for the case.

The relief, which ended on 1 April, meant goods under £15 could be sold VAT-free from the islands to the UK.

The final costs, for which the States of Guernsey and Jersey were jointly liable, were negotiated down by 50% as the UK Government changed its argument late in the appeal creating extra costs for the island.

Guernsey's Policy Council said the island's £35,000 legal costs meant the States had spent a total of £105,652.92 in pursuing the legal action.