Jersey and Guernsey negotiate tax relief legal costs

Jersey and Guernsey's States are negotiating the legal costs for their failed attempt to reinstate tax relief for online shopping.

The islands launched a legal challenge when the UK Treasury announced it was going to stop Low Value Consignment Relief (LVCR) on 1 April 2012.

It allowed goods under £15, such as CDs and DVDs, to be sold from the Channel Islands to UK consumers without VAT.

It failed and HM Revenue and Customs was awarded costs.

'Both liable'

The two governments are working together to try to reduce the amount they have to pay in legal fees.

A spokesman for Guernsey's Policy Council said the islands have worked together through the whole court case and are both liable for the costs.

He said the High Court agreed there would be a reduction in costs awarded of 50% - so Jersey will pay 25% and Guernsey will pay 25%.

It is not yet known how much the legal costs will be.