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The first day of November saw the implementation of a reduction in VAT relief, in an attempt to prevent exploitation of a VAT scheme. Goods which were priced at £18 and less could, until now be shipped into the UK from outside the European Union, without paying VAT. This tax relief was open to exploitation, with a number of UK small businesses suffering as a result.

Taking advantage of the loophole, a number of companies either set up a base in the Channel Islands, or outsourced to companies already in operation there. Goods priced at £18 or less could be shipped to the UK without the addition of VAT, saving between 15 and 20 percent and undercutting retailers on the high street. The Low Value Consignment Relief has now been reduced to apply to goods priced £15 or less, in an attempt to curb VAT exploitation, with experts believing the relief may be abolished altogether.

Among goods commonly affected by the LVCR are CDs and DVDs, health and vitamin products, contact lenses, memory cards and printer cartridges. Experts believe the government may make a further announcement which will restrict the items eligible for the tax relief, which may include the restriction of CDs and DVDs. and Amazon are just two of the companies who took advantage of the LVCR. When it appeared that the tax relief may come to an end, was sold.

Finally, the government have acknowledged the unfairness of the practice, promising to deal with the problem.

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