VAT Changes To Push Up DVD Prices

A sales tax loophole, which allows consumers to buy millions of cheap CDs and DVDs from the Channel Islands, has been closed.
Chancellor George Osborne has decided on a change to the VAT regime in a move that will cost shoppers at least £100million a year.
Supermarket giants such as Tesco and Sainsburys have been able to use the VAT dodge-
which sees items costing less than £15 being imported to the UK from locations outside the EU - such as the Channel Islands - without carrying VAT.
These supermarkets along with Internet specialists Amazon and Play.com were able to sell DVDs in some cases for as little as £3.
Now the new measures suggest firms will now add the sales tax to all their products shipped in from the Channel Islands.
The change, which comes into effect in April next year, could add £2 to the price of a blockbuster DVD, such as the Lion King, taking it up to £12.
(LB)