The Forum of Private Business – a Cheshire-based organisation that represents 25,000 small to medium sized businesses across the UK – is unhappy that its members are being undercut by the supermarket giant.
Tesco sparked a price war in December when it set up a website called Tesco Jersey, which takes advantage of the Island’s absence of a sales tax and its position within Europe’s customs borders but outside the European Union – which means that goods worth less than £18 exported from Jersey are exempt from VAT.
FPB chief executive Nick Goulding said that members running independent record shops were angry as they were already struggling to compete with supermarket prices.
‘It’s scandalous that giants like Tesco, as well as other online operations such as Amazon, can undercut local retailers by taking advantage of a legal loophole to avoid paying VAT,’ he said.
‘Gordon Brown must close this loophole because supermarkets should not have any competitive tax advantage over high street shops.
‘Although we do our best to compete on quality by providing for niche markets, such as vinyl and imported and second-hand records, our core business has been gradually eroded by the supermarkets.
‘In the past we would see a healthy increase in sales over the festive period but now there’s barely any change to our general turnover.
How are we supposed to compete when the likes of Tesco are advertising CDs that are cheaper than we can buy them from the distributors? ‘And I’m sure Jersey record shops are equally worried about what I see as systematic tax evasion.
