Every little helps, Tesco sets sail for Channel Islands tax dodge

14 April 2010

Bitterwallet - tesco logoThere are plenty of companies sitting just outside the UK exploiting the tax benefits of trading from the likes of the Channel Islands; Play.com have built their reputation on it. Now the biggest retailer in the UK are muscling in on the game. Or rather, back into the game.

Tesco simply aren't making enough money by buying in masses of stock at bulk discount; according to the Guardian, they've quietly began fulfilling orders for their Tesco Entertainment website from Guernsey. Four years ago, Jersey kicked Tesco out for exploiting the European tax directive that waives VAT on some personal imports from outside the EU. A quick look at the website reveals Tesco Jersey has been resurrected, but instead fulfills orders from Guernsey:

Bitterwallet - Tesco Jersey and Tesco Guernsey

The VAT relief applies to goods bought for £18 or less, and since 95 per cent of all DVD transactions fall under that threshold, fulfilling orders from the Channel Islands means a company can offer more competitive prices. And everyone's at it, with outsourcing deals aplenty - WH Smith, ASDA, Argos, HMV all have deals with distributors there. The reason Play.com is more famously flagged up as a Channel Island operator because it's the only retailer that's actually based there.

If everyone's doing it, what's the problem? The issue seems to be because it's Tesco, and the feeling that as the UK's biggest retailer they shouldn't be resorting to tax-dodging to make their money. Of course Tesco only want you to think of the children: "We have to remain very focused on price in this fiercely competitive market. The benefits from the VAT savings are passed straight to customers in the form of a lower price." Tesco want you to know they're doing it all for you, and Tesco doesn't benefit from the situation at all. Except of course, by selling more stock, generating more revenue and in turn more profit. Apart from that.

[The Guardian]

TOPICS:   Economy

9 comments

  • hmmm
    "Tesco simply aren’t MAKE enough money by buying in masses of stock at bulk discount; "
  • joseph c.
    People must boycott Tesco, the reduction in vat will have to be made up by us mugs who have no alternative but to pay up. Every little helps for their shareholders. Perhaps the Ryanair boss should advise them on other sly stunts they could pull.
  • Alan C.
    So just like people changing where they buy their groceries from to get the lowest price Tesco are shopping around for a better tax rate. big deal, maybe the UK government should offer tesco "pay vat get the next vat payment half price" offer to temp Tesco back?
  • Nobby
    I don't really care that the government (and therefore us) loses out if you purchase from tesco jersey. I wouldn't have bought much from tesco entertainment before, simply because other places use the same dodge to give us cheaper prices. There is no difference to the amount the UK government gets. I wouldn't have bought from them before they were "in" jersey if they were not the cheapest, and now I might if they are the cheapest.
  • Ian
    I don't blame them when their operations manager's job is to reduce costs, and they have shareholders to satisfy. Don't hate the player, hate the game.
  • Bogbrush
    "I look forward to 20% VAT so that I can pay even more for DVDs." Is that what you're saying?
  • Ten B.
    [...] Every little helps, Tesco sets sail for Channel Islands tax dodge [...]
  • -]
    "Don't hate the player, hate the game." What are you, 12?
  • Ritchie
    The Richer people wouldn't be trying to dodge their tax if the silly government didn't take 60% of their money, they do it too teachers as well. It's not like they sit on there asses all day!

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