LVCR use by CI 'is not tax avoidance'

USE of LVCR by the Channel Islands was not tax avoidance, Mr Justice Mitting concluded yesterday.

In the morning both Guernsey and Jersey summed up their cases in the High Court.

For Guernsey, Sam Grodzinski QC said: 'There is nothing in the principal VAT directive that begins to suggest you can treat goods being imported from different countries differently depending on their national origin.'

HMRC had earlier argued that the scale of the use of LVCR from the Channel Islands amounted to tax avoidance, which was one of the reasons why government could act as it proposed.

But the judge, Mr Justice Mitting, said: 'I think it's impossible to describe establishing a business from a territory that you can make tax free supplies to a member state as avoidance, it's the legitimate exploitation of a trade opportunity.'