The practice of online companies such as Apple, Netflix and Sports Direct charging VAT would be investigated and companies asked to ensure Islanders only pay GST and not VAT, if two changes to the 2018 Budget are approved later this month.
The amendments, from Senator Philip Ozouf, come as the Jersey Consumer Council has called for Jersey’s high-street retailers to come clean about whether they are charging VAT-inclusive prices to Islanders in their shops, despite the tax not applying in the Island.
Currently the UK’s Value Added Tax – a sales tax added to the price of goods and services – is charged at 20 per cent, while the Jersey equivalent – the Goods and Sales Tax – is just five per cent.
This month Treasury Minister Alan Maclean’s Budget for 2018 is due to be debated in the States.
His predecessor, Senator Ozouf, has lodged two amendments which, if approved, could see the issue of online companies applying VAT to goods and services bought by Islanders tackled.
Under Senator Ozouf’s proposals, Senator Maclean would be asked to:
- Investigate the practice of UK companies – such as Amazon third parties, Boots, eBay, Marks and Spencer and Sports Direct – charging VAT on goods delivered to Jersey following online purchase.
- Engage with firms such as Apple, Amazon Prime, Cineworld and Netflix to ensure that Islanders only pay GST and not VAT on digital services.
If the proposal is approved, Jersey Post could be asked to arrange for VAT refunds for Islanders who have bought goods online, where necessary.
Meanwhile, Anne King, the executive officer of the Jersey Consumer Council, has called on all UK franchises with shops in Jersey to state clearly whether they are charging UK prices –including the cost of VAT – to Islanders.
Mrs King said that if the price inclusive of VAT is charged, businesses have a duty to explain why.
‘Without that clarification, the consumer just thinks it is greed,’ she said.
According to a survey of 581 customers conducted last summer by the council, more than 70 per cent felt they were being charged VAT-inclusive prices by shops.
Mrs King said that Island consumers were being left with two choices – ‘take it on the chin’ and pay the extra cost and feel ‘a bit ripped off’, or buy a product online instead.
She added said that another issue that needed to be addressed with retail was the ‘appalling customer service’ some businesses offer.
David Eliot, the chairman of the Retail Association and business development executive of Voisins, said that improving customer service is a priority.
‘Customer service is long remembered after price is forgotten,’ he said.
Mr Elliot added that the association was planning to raise the issue of charging VAT-inclusive prices in Jersey with the head offices of UK franchises early next year.
The Budget debate is due to take place on 28 November.
