Those naughty tax dodging Tesco types have announced they have moved their online CD and DVD mail order business to Switzerland so that they can continue to enjoy a controversial VAT loophole.
As much previously reported, Tesco is one of a number of etailers who have in the past based their online CD sales operations on the Channel Island of Jersey. A base on the island was beneficial because, while geographically convenient for mail order services to the UK, Jersey is not in the EU and, because of the way European sales tax systems work, goods imported to the UK from there that cost less than £18 were not subject to VAT. Which meant Tesco, and others, could sell CDs at cheaper prices than high street or online operations based within the UK.
But the tax loop hole has proved controversial and, with proactive lobbying from independent retailer associations whose members struggle to compete when major mail order firms can sidestep taxes in this way, politicians on both Jersey and in the UK have slowly been making moves to close the loophole in relation to low cost products imported into Britain from the channel island.
While tangible measures to actually close the loophole have not come as fast as verbal commitments to do so, recent changes in Jersey law have made it harder for etailers to benefit from the tax avoidance system, hence Tesco's decision to move their online operations to another county geographically close to the UK but outside the EU - Switzerland.
The retailer confirmed this week: "Following changes in local legislation in Jersey and so that we can continue to offer these great prices to our customers the fulfilment operation of this business is now based in Switzerland". Because of course that's why huge retail congloms go out of the way to avoid paying taxes - to benefit the common man.
The move is sure to anger the UK's Forum Of Private Business who have been desperately trying to close the Jersey loophole, though whether they will be able to persuade the UK government to act at their end to stop such continued tax avoidance remains to be seen - some tax experts suspect not, despite politicians expressing verbal support for the independent retailers.