08 August 2012 10:38
HMV has shut down operations on the island of Guernsey following the removal in April of long-standing tax concessions which exempted low-value exports to the UK market from VAT.
'Low-Value Consignment Relief' (LVCR) has historically allowed goods imported from non-European Union (EU) territories to be sold free from VAT in the UK market, provided they are priced at less than £15. However, from April 1st 2012, the Government controversially removed the exemption for the Channel Islands despite it being retained for other non-EU nations.
HMV is one of a substantial number of companies that were lured to the Channel Islands by the incentive. The removal of LVCR is expected to decimate the Channel Islands' fulfilment industries, which had attracted industry-leading giants, such as Tesco, Amazon and Play.com.
The closure of HMV's Guernsey warehouse, established in 2006, will cost the island 46 jobs. The company is to transfer its Guernsey operations to its existing UK distribution centre in Merlin Park, Birmingham.
In other news, HMV has completed the £32 million sale of Hammersmith Apollo following clearance by the German Federal Cartel Office and the Office of Fair Trading. The venue has been sold to a new joint company formed by AEG and CTS Eventim, Stage C Limited.
As a result of the sale, HMV is expected to amend its existing £220 million bank facility with its existing lenders and extended it to September 30th 2014.