Pressure mounts on Channel Islands' VAT loophole

More than 1,000 local jobs could be at risk as pressure mounts on the Channel Islands online shopping industry.

A debate in the House of Lords gained cross-party support to close a VAT loophole which costs the UK government £130m each year in lost tax.

The peer behind the motion, Lord Ralph Lucas, branded the industry a "smuggling enterprise".

Goods worth under £18 sent to the UK from outside the EU, including from the Channel Islands, have VAT-free status.

A number of online shopping companies take advantage of the Low Value Consignment Relief.

The Commercial Secretary to the Treasury, Lord Sassoon, said changes to the loophole would be announced in the budget later this month.

More than 1,000 people work in the industry in the Channel Islands.