Channel Islands lose LVCR court challenge The Channel Islands have lost their judicial review against the end of Low Value Consignment Relief (LVCR). The hearing lasted three days in London and critics say the ruling puts thousands of jobs in Jersey and Guernsey at risk. As of April 1, internet mail order goods from the Channel Islands will no longer be VAT exempt. LVCR was introduced in 1984 with the aim of minimising administration costs for EU member states. It exempted any import from outside the EU below a threshold value from VAT, allowing firms in the Channel Islands to charge less for small items. LVCR was popular with online retailers in particular as it allowed them to offer cut-price DVDs, CDs, spectacles and books. But UK-based traders successfully argued the relief gave firms in the Channel Islands an unfair advantage. RAVAS, a group of British retailers, complained to the European Commission. In November of 2011, after discussions with the EU, Chancellor George Osborne announced that LVCR from the Channel Islands would be scrapped completely. In today's court hearing, the legal team representing the UK said it was a problem the government felt it had to address, given the scale of the industry and the value of the tax they feel is being avoided. Lawyers for Jersey and Guernsey argued that abolition would be unlawful and lead to devastating consequences for their economy. David Vaughan QC, on behalf of Jersey, said there were fears that the legislation might lead "to the whole trade leaving and going to Switzerland or some other place" outside the EU. Jersey's economic development minister Alan Maclean said he was extremely disappointed by the court's decision and was considering a further appeal. "The changes, which are targeted against the Channel Islands alone, create an uneven playing field," he said. We know that some businesses will find it difficult to compete under these circumstances and as such, jobs are likely to be lost. This will be a very difficult time for hundreds of islanders who are involved in the fulfilment industry. RAVAS spokesman Richard Allen said: "While we of course have sympathy for the effect on employment in the Channel Islands that the closure of this industry will have, it is for the people of the islands to strongly question their elected representatives as to how they could possibly allow an industry that was based on the abuse of tax to become so important to the Islands' economy."