UK government's tax figures 'optimistic', Jersey Post's boss says

The UK government will benefit less than it predicts by ending tax relief for Channel Island companies, according to the head of Jersey Post.

The Treasury is to close the loophole that allows island firms to sell low-value goods VAT-free to UK customers.

George Osborne said the Treasury would make an extra £90m in the first year.

Kevin Keen, the chief executive of Jersey Post, said that figure was optimistic with fewer DVDs being sold because of increased downloads.

HM Revenue and Customs has published proposals to end Low Value Consignment Relief (LVCR) from April 2012.

In his Autumn Statement, Mr Osborne said: "We're going to tackle the exploitation of LVCR.

"[It] has left our High Street music stores fighting a losing battle with warehouses in the Channel Islands."

It is feared the move could threaten hundreds of jobs, including some in the postal service.