'Profiteering' fear in Jersey over UK VAT

VAT increase
Image caption Officially, the VAT increase should not impact on goods sold in Jersey

The head of Jersey's consumer council has said he fears the UK VAT rise will be passed on to Jersey shoppers despite it not being applicable.

VAT has risen from 17.5% to 20% on goods in the UK.

Senator Alan Breckon told BBC News that some shops in Jersey already sold goods at VAT-inclusive prices and these shops could be profiteering further by increasing prices to the new level.

Senator Breckon said the States needed to regulate pricing in Jersey.

Jersey taxes goods and services at 3% and does not charge VAT.

Last year, Deputy Mike Higgins asked the States to investigate pricing after goods were found on sale at a VAT-inclusive price, with some shops arguing that freight costs led to the extra on the price tags.

His proposal was rejected by the house which said it was up to individual shops to decide what they charged.

Senator Breckon told BBC News that there was a way to regulate prices in the island.

He said "Under the regulations of undertakings if someone is given a license to trade then, for example, their licence may say that they must demonstrate at least 10% price difference to the UK - of course in many instances it's too late to do that because the companies are already set up and operating.

"If you go in the High Street and look at some shops you'll see that their pricing has not changed from the UK which includes VAT and the interesting thing is recently it was 17.5% but it was reduced to 15% and it's now 20%.

"So if there is an increased cost to operate in Jersey, and I've yet to see any evidence of that, then why does it vary between these amounts?

"Is it perhaps a situation were some are profiteering and have taken millions of pounds away from Jersey consumers because they have been a bit of a captive market?"

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