Commenting on the changes to low value consignment relief (LVCR) in today's Budget, Daniel Lyons, Indirect Tax Partner at Deloitte, said:
"The impact of these changes will be more limited than had been widely expected. The threshold will be reduced from £18 to £15 which HMRC estimate will raise only an extra £5m this year. It will still be possible for many items to be imported without customs duties or VAT being applied and there will be minimal impact to those companies currently utilising LVCR. The reduction is less than permitted under EU law which would allow the exemption to be reduced to approximately £9. However, Budget 2011 publications suggest that discussions with the European Commission are ongoing."
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