The Treasury has told the BBC it is actively reviewing the operation of a tax relief being blamed for forcing small UK internet retailers to close. Low Value Consignment Relief allows goods under £ 18 in
value to be sent VAT-free to the UK from outside the EU. It has led firms such as HMV, Tesco and Amazon to open big warehouse operations on the Channel Islands. The Treasury says it is, in effect, looking into whether it would be economical and
practical to end LVCR. In order to benefit from the VAT relief, household names such as Tesco, Amazon and HMV as well as many other less well-known companies ship goods from the UK to warehouses on the Channel Islands, break them down into
individual customer orders and then post them back to Britain. The whole process is entirely legal.
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