Channel Islands lose their bid to save the fulfilment industry

In a huge, but not unexpected blow to the Channel Islands, they have today lost their bid to overturn the UK Treasury's decision to disallow Low Value Consignment relief (LVCR) on goods shipped to the UK from the Channel Islands.


The Islands had argued that  removing the LVCR for Channel Islands goods, but leaving it in place for all other non-EU jurisdictions, was not consistent with EU VAT law.  The High Court has rejected this argument.


Therefore, from April 1st, it is anticipated that VAT will be applied to all commercial consignments from the Channel Islands, regardless of value, effectively killing off the Islands' fulfilment business, which is estimated to account for around 2,000 jobs across the two territories.  


It is not yet clear whether an attempt will be made to appeal the decision.  The decision will impact not only the fulfilment businesses themselves, but also numerous other service providers who have developed service offerings based on the industry - such as trust companies and lawyers who assist with the establishment and running of the structures.