The Wholesale Forums

[killah]

Many online retailers are choosing to fulfil entertainment orders using Jersey-based subsiduaries. New companies are also choosing to set up shop on the island. Jersey has no VAT on goods sold there, and, as long as items cost less than £18 and are posted individually, Revenue & Customs cannot impose tax when the goods are brought into mainland UK.


Didnt know that, most of the big guns are baes in jersey as well.

ASDA Entertainment http://www.asda-entertainment.co.uk Choicesdirect.com http://www.choicesdirect.com Moviemail http://www.moviemail-online.co.uk/ Play.com http://www.play.com/ Sendit.com http://www.sendit.com/ Tesco Jersey http://jersey.tesco.com/ WHSmith http://www.whsmith.co.uk/whs/go.asp?menu=DVD_AND_Video&pagedef=
/dvdvideo/home/index.htm

[D M]

Even goods worth £18+ aren't getting taxed by customs, if you use certain couriers. I don't know if it's a customs or courier problem.

With the growth of e-commerce it's only going to get worse. The fair would be to tax anything and everything bigger than a letter.

I think I remember Gordon Brown mentioning it in the last budget but that was nearly a year ago?

[killah]

Totally agree because it make sit harder for people like myself starting in the modern entertainment world.

[MickUK]

Yeh everyone seems to be based in Jersey. Sure one of the major bookmakers in the UK base themselves over there also. Not really sure why but seems to be where a lot of companies are.

[Anthony]

Originally Posted by MickUK

Yeh everyone seems to be based in Jersey. Sure one of the major bookmakers in the UK base themselves over there also. Not really sure why but seems to be where a lot of companies are.

Simple, it's tax efficient for them.

A lot of the larger companies and many smaller firms too are based outside of the UK in places like Switzerland, Cyprus, Luxembourg etc as it's tax efficient for them. Corporation tax in the UK is 40% at it's highest, Switzerland is around 25% and places like Cyprus and Luxembourg are even lower. (Around 10-20%)

This sort of thing has been going on for decades, it's only really worth while when there is some money going through your business though.

[Beneddie1112]

Isn't it related to the Swiss bank accounts, the fact that it is a tax haven?

[Anthony]

Originally Posted by Beneddie1112

Isn't it related to the Swiss bank accounts, the fact that it is a tax haven?

Switzerland isn't a true tax haven. It may be classed as one because it has a lower corporation tax rate than the UK and other countries but a true tax haven is a country that doesn't charge tax at all. The Seychelles is a true example of a tax haven. The Cayman Islands is another. Both extremely popular for businesses/individuals wishing to maximise their wealth.

Switzerland has a lower rate of corporation tax than the UK and VAT levels are also lower which is why a lot of companies choose to base themselves over there and pay the lower taxes. This is called being tax efficient. Some say a little devious, but it's common knowledge and something that a lot of organisations have been taking advantage of for decades.

The Swiss bank accounts is a completely separate issue, what people were doing was taking advantage of the above, not declaring their off shore incomes/savings and therefore not paying tax (within their home country) which as you should know, is illegal and classed as tax evasion. Having an off shore bank account isn't illegal, which is often a misconception, what is illegal is not paying tax to the country you are a citizen of. In 2005 they brought in the EU Savings Directive scheme where by member states share information on citizens with off shore accounts and ensure taxes due on are actually paid. This doesn't stop those who evade tax, there are still a lot of countries that aren't members of the EU Savings Directive, many have moved their off shore accounts to these countries to avoid being rumbled by their home state.

It's quite a complicated procedure and certainly not always tax efficient as it depends on your situation. As I already mentioned, it usually isn't worth exploring until you can take full advantage of it. It's not just corporation tax that you may be able to make more efficient, it could be income tax, inheritance, a whole load of things.

Anyway, straying off topic slightly. You get the idea.

[cbeebies]

Originally Posted by killah

Many online retailers are choosing to fulfil entertainment orders using Jersey-based subsiduaries. New companies are also choosing to set up shop on the island. Jersey has no VAT on goods sold there, and, as long as items cost less than £18 and are posted individually, Revenue & Customs cannot impose tax when the goods are brought into mainland UK.


Didnt know that, most of the big guns are baes in jersey as well.

ASDA Entertainment http://www.asda-entertainment.co.uk Choicesdirect.com http://www.choicesdirect.com Moviemail http://www.moviemail-online.co.uk/ Play.com http://www.play.com/ Sendit.com http://www.sendit.com/ Tesco Jersey http://jersey.tesco.com/ WHSmith http://www.whsmith.co.uk/whs/go.asp?menu=DVD_AND_Video&pagedef=
/dvdvideo/home/index.htm

It is the same in US. Lots of online companies or big guns registered them in Nevada or Deleware. So they don't need to pay state tax.

[blagger]

Play.com are based in Jersey, make companies like mine struggle.

[Lumber Joe]

Originally Posted by Anthony

Switzerland isn't a true tax haven. It may be classed as one because it has a lower corporation tax rate than the UK and other countries but a true tax haven is a country that doesn't charge tax at all. The Seychelles is a true example of a tax haven. The Cayman Islands is another. Both extremely popular for businesses/individuals wishing to maximise their wealth.

That's true. Switzerland is not characterized with low taxes, but it is an offshore banking center.