When goods are imported into a

European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are Geography of the European Union, located primarily in Europe. The u ...

country from a non-EU territory, those goods may be subject to

customs duty A tariff or import tax is a duty imposed by a national government, customs territory, or supranational union on imports of goods and is paid by the importer. Exceptionally, an export tax may be levied on exports of goods or raw materials and i ...

, excise duty and

value-added tax A value-added tax (VAT or goods and services tax (GST), general consumption tax (GCT)) is a consumption tax that is levied on the value added at each stage of a product's production and distribution. VAT is similar to, and is often compared wi ...

. Value-added tax is an EU tax adopted by the member states of the European Union. However, an optional exception was allowed on low value shipments to member states in the form of an EU administrative VAT relief, known as Low Value Consignment Relief or LVCR. It was governed by the EU Council Directive 2009/132/EC. LVCR was an optional form of VAT relief designed to speed up the transit of low value goods through the mail which might otherwise be delayed by customs and also to reduce the cost of tax collection where it might not be practicable. Member states, if they decided to allow this relief, could set it at a maximum limit of between €10 (£) and €22 (£), but had to ensure that it was applied in a way that did not cause competitive distortion or allow VAT abuse. After the Brexit transition period, the UK withdrew LVCR meaning that all imports to the UK have attracted VAT regardless of their value since 1 January 2021. The European Union implemented changes from 1 July 2021 that effectively ended LVCR. An example of the use of LVCR was found in the LVCR allowed by the UK on shipments originating from the Channel Islands. While this was in place, internet-order fulfilment centres were set up in the

Channel Islands The Channel Islands are an archipelago in the English Channel, off the French coast of Normandy. They are divided into two Crown Dependencies: the Jersey, Bailiwick of Jersey, which is the largest of the islands; and the Bailiwick of Guernsey, ...

for the postal distribution of packages valued under £18 (€). In 2011 the UK Treasury announced that from 1 April 2012, LVCR would no longer apply to goods imported to the UK from the Channel Islands. It was announced on 4 October 2012 that Condor Logistics would close its operations with the loss of about 180 jobs (110 in the UK, 50 in Jersey and 20 in Guernsey). The closure was blamed on changes to LVCR affecting the Channel Islands. In August 2013, Huelin-Renouf, which had operated a lift-on/lift-off container service for 80 years between the

Port of Southampton The Port of Southampton is a passenger and cargo port in the central part of the south coast of England. The modern era in the history of the Port of Southampton began when the first dock was inaugurated in 1843. After the Port of Felixstowe, ...

and the Port of

Jersey Jersey ( ; ), officially the Bailiwick of Jersey, is an autonomous and self-governing island territory of the British Islands. Although as a British Crown Dependency it is not a sovereign state, it has its own distinguishing civil and gov ...

, ceased trading, although the business was later taken up by a market entrant, Channel Island Lines.

References

Value added taxes {{EU-stub

See also

References