Online orders safe from extra tax…for now

Wednesday 03 October 2018

Plans to make more online shoppers pay GST in a drive to save the high street have been cut from the 2019 Budget after Ministers failed to agree on the issue, Express understands.

Treasury Minister Deputy Susie Pinel last week revealed she was considering reducing the £240 minimum limit for imported goods to be hit by the 5% tax to help the island’s struggling retail sector, ahead of the Budget.

The Treasury Minister had been looking to bring proposals forward in the 2019 Budget, which is due to be unveiled imminently, but sources told Express that the idea was dropped when the Council of Ministers failed to reach a consensus on the issue.

While a vote revealed appetite amongst some Ministers, others did not consider the move appropriate in the current economic climate, and felt that there were more effective ways to revitalise local retail.

Pictured: Local retailers felt that sites like Amazon were not on a "level playing field" due to the 'de minimis' clause.

However, that decision could still be reversed in a last-minute U-turn when Ministers agree the final Budget in a meeting today.

Even if the ‘de minimis’ level is not revised this year, it is expected that the topic will rear its head again as Brexit hits and amid heightening international discussions over how sales taxes should be charged across borders.

This latest update will nonetheless be a welcome relief for over 1,000 islanders who recently signed a petition aiming to halt plans to reduce the £240 threshold. 

Consumer Council Chair Carl Walker described the decision to keep ‘de minimis’ revisions out of the next Budget, which is due to be released next week, as a “victory for common sense.”

“How on earth the government could have even considered taxing, through legislation, the shopping we do online costing less than £240 without consulting consumers first is beyond me,” Mr Walker commented. 

Pictured: Carl Walker, Consumer Council Chairman.

"Taxing the opposition will not encourage more people to use the town centre. Even with the 5% added to all of their online shopping, it will still be cheaper and easier to shop online. We need a multi-agency approach to look at how we avoid St Helier becoming a sea of coffee shops and restaurants. What about free parking and buses on Saturdays? What about looking into a rent cap per square foot on retail space? What about relaxed trading hours? This is where retailers' energy should be focused - not trying to change consumers' shopping habits through taxation," he said.

If or when the subject re-emerges, the Chairman said he hoped the lobby group would be invited to share its views on reviving bricks-and-mortar retail in a way that isn’t detrimental to shoppers’ pockets. 

The government’s own purse strings will also play a part in discussions, sources added, as one of the key issues is whether processing tax on low-value items could actually end up losing them money. 

Former Treasury Minister Philip Ozouf explored the issue back in 2014, concluding that removing the limit entirely would earn almost £800,000 per year for the taxman, but would also mean a significant increase in workload for Jersey Post and Customs.