Fulfillment

Fulfillment – a Fools Errand?

Dec 20th 2011 -
Jersey and Guernsey are considering a court case against the UK for closing the tax loophole which allowed us to export items below a certain value to them without said items attracting VAT.

A whole industry had sprung up around this tax ‘kink’, which reportedly employs around 1,000 peole here.
It does seem to me, however, that attempting to challenge how the UK manages its own tax affairs is not only probably a waste of money, but also of questionable benefit.

Let me explain. Of course Jersey needs to diversify its economy – we are dangerously reliant on a very fickle industry at present – the finance ‘industry’. But – is the fulfillment industry of any benefit to us?
The owners of the businesses, under our wonderful zero / ten taxation system, probably don’t pay tax locally.
Those working in the industry are traditionally low-paid and, as a consequence, probably require Income Support to exist. They will, however, be using our free education, hospital and other services. In other words, does fulfillment benefit Jersey – or is it a drain on us?
Then there’s the effect sending all those items to the UK has on our postal system. We deliver incoming mail from the UK for Royal Mail – and they deliver our mail sent to the UK. Fine and dandy – but – because fulfillment causes a huge imbalance (the R. Mail delivers far more of our mail than we deliver of theirs) Jersey Post has to pay Royal Mail several million per year in offset. To further complicate matters, the amount paid is related to local postage charges, which means the higher Jersey Post keeps its local mail charges, the lower the price it pays the R. Mail.
Does seem to me that a cost / benefit analysis of this industry is overdue.

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