Companies warned VAT-free CD loophole could close

Jersey internet-based businesses have been told a VAT loophole could close despite talks with the UK government.

Low Value Consignment Relief means companies in the Channel Islands can sell CDs and DVDs under £18 VAT-free.

Jersey's government has been holding confidential talks with the UK government, and the industry in Jersey was briefed on the progress on Monday.

Economic development minister Senator Alan Maclean said despite the talks, companies need to think about changes.

He said: "We're going to continue to fight hard in order to sustain this industry for as long as we possibly can."

Earlier this year the Chancellor announced the VAT threshold was being lowered from £18 to £15 from November.

The change is part of measures introduced by the UK Government to clamp down on tax avoidance and help music stores.