The government is considering closing a tax loophole that is apparently being used by big retailers such as HMV, Tesco and Amazon to sell DVDs and CDs more cheaply over the web.

According to the Forum for Private Business (FPB), 60 MPs have backed its campaign to stop firms importing goods VAT-free from the Channel Islands if they have a value of less than £18. It is calling for the government to lower the threshold.

Following discussions in Parliament, paymaster general Dawn Primarolo has promised the government is “keeping the issue under active review.”

But FPB campaigns manager Victoria Carson said:

“We have seen this government pay lip service to the issue before and we will not rest until action is seen.”

“Many larger retailers have relocated operations to the Channel Islands, importing goods from the UK and then exporting them back to the mainland to take advantage of this loophole. If the threshold were lowered, they would no longer be able to do that.”

Watch this space…