RAVAS
The Original Success Story

CLOSING THE CHANNEL ISLAND VAT LOOPHOLE

RAVAS was established in 2009 by Richard Allen, who had to shut down his long-established online mail order music business in 2007 due to unfair, VAT-free competition from The Channel Islands. This competition exploited an import VAT exemption called Low Value Consignment Relief (LVCR), allowing online retailers to avoid charging VAT on mail order goods sold to UK customers. Items such as CDs, DVDs, cosmetics, cut flowers, video games, health supplements, and many more were sent from the UK to the Islands and then sold back to the UK VAT-free.

Richard Allen campaigned against this issue since 2005 and filed a complaint with the European Commission in 2006. By 2010, the UK authorities faced infraction proceedings if they did not address the LVCR abuse. As a direct result of the complaint, in November 2011, the UK government announced that LVCR would no longer apply to mail order goods sent from The Channel Islands to the UK.

In March 2012, RAVAS supported HMRC in a major court hearing where The Channel Islands tried to block the removal of LVCR. RAVAS provided critical evidence, leading to a court ruling in favor of removing LVCR. On April 1, 2012, LVCR was removed from Channel Island mail order goods, leading to the collapse of this trade within a year.

This victory saved many UK businesses from VAT-free competition, and RAVAS was later asked to contribute to a report by Ernst and Young for The European Commission.

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ENDING THE BILLION POUND VAT FRAUD

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In 2015, Richard Allen connected with Neven Juretic, founder of VATfraud.org, who had uncovered a £1 billion VAT fraud on Amazon and eBay. Chinese sellers were evading VAT by selling stock from UK warehouses without accounting for VAT, and HMRC was not addressing this issue. In October 2015, Richard and Neven brought this to the EU Commission and national newspapers, gaining significant media coverage and attention from government officials.

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Despite initial inadequate legislation proposed by HMRC, RAVAS and VATfraud.org continued to campaign. By April 2017, the National Audit Office investigated the issue, producing a report that criticized HMRC's handling of the fraud. This led to improved legislation requiring retailers to display VAT numbers.

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Subsequent Public Accounts Committee and Treasury Committee hearings saw senior HMRC officials and executives from Amazon and eBay questioned. Richard Allen of RAVAS provided evidence, and the issue was featured in the Panorama documentary "The Billion Pound VAT Scam" in December 2017.

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Throughout 2019, with support from RAVAS, Lord Leigh and Lord Lucas raised the issue in the House of Lords and with The Treasury. The Genesis Initiative and The Association of Accounting Technicians (AAT) also joined the campaign, highlighting the significant VAT losses.

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In April 2020, HMRC consulted with RAVAS and VATfraud.org on new proposals, and by July 20, 2020, the government published changes to the VAT treatment of overseas goods sold to UK customers.

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After five years of campaigning, RAVAS and VATfraud.org succeeded in making online marketplaces collect VAT, introducing the strongest online VAT measures globally. These measures aim to restore fair competition for UK retailers who have long suffered from VAT abuse.