Taxation: Low-value Consignment Relief

Lord Lucas Excerpts

Tuesday 1st March 2011 Lords Chamber

Asked By

[Lord Lucas]

To ask Her Majesty’s Government whether they have assessed the cost to the Exchequer of Low Value Consignment Relief.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, the latest estimate of the annual cost to the Exchequer of low-value consignment relief is £130 million for calendar year 2010, a reduction from the previous estimate of £140 million for fiscal year 2009-10.

[Lord Lucas]

My Lords, I am grateful to my noble friend for that Answer, which I find mildly unbelievable since the turnover of the largest company involved in this scam is around £500 million—and that is just one of them—on which we lose around £100 million a year. Does my noble friend agree that what started out as a quite reasonable relief for Channel Islands flower growers has now been abused to the point where it has destroyed whole industries in the UK? You can no longer on the internet retail records, computer memory, contact lenses or gifts. It is ever expanding and costing us thousands of jobs and, as the Minister says, hundreds of millions of pounds. Has not the time come to put a stop to it?

[Lord Sassoon]

My Lords, there is a very wide range of estimates of the effect of LVCR but I believe that the HMRC data are as reliable as—more reliable than—any. I am grateful to my noble friend for drawing attention to this issue because the Government are committed to tackling tax avoidance. In that context, we are actively reviewing the operation of this relief. Ministers hope to be in a position to announce any possible changes to the operation of LVCR flowing from the review in the Budget on 23 March.