States will help web-based firms if VAT loophole closes

Jersey's internet-based businesses facing changes to tax-free rules will get as much support as possible, the treasury minister said.

The value of goods firms can sell tax-free to UK customers is set to drop to £15, from £18, but there is concern the loophole could be closed altogether.

Changes, coming into force next month, have been prompted by pressure from UK retailers that are being undercut.

But, the Chamber of Commerce accused politicians of failing island firms.

The move could mean hundreds of job losses, but the treasury minister said the States would help the industry survive.

But treasury minister Senator Philip Ozouf said the States would help them.

He said: "We've got to help these businesses through what could be a difficult transition but we will give them all the support we can."

Play.com and My Memory are among the companies based in the Channel Islands selling products like cut-price CDs and DVDs, which are valued at less than £18 that can be shipped VAT-free to customers in the UK.

The chamber is worried about how changes would affect those companies, and the year round ferry and freight service as well Jersey Post.