Online retailer GST estimated to bring in extra £1.1m a year

Tuesday 25 July 2023

Having to pay GST on the full amount of any item bought from a large online retailer such as Amazon will net the public purse at least £1.1m a year, according to the Treasury Minister.

Since 1 July, islanders buying goods online from retailers registered with Revenue Jersey have had to pay GST on the full amount, which is automatically added to the total when they click to purchase.

A £100 item will therefore cost £105, with the retailer wiring the £5 tax to the Jersey exchequer.

Just over 20 large online retailers whose annual Jersey-related turnover is above the £300,000 minimum required to charge GST on all online goods have registered to do so.

Firms whose Jersey sales are less than £300,000 do not need to register. In this case, online sales costing more than £60 will be held by Customs in Jersey until GST on the full amount is paid by the customer. 

The ‘de minimis’ threshold used to be £135 but this fell to £60 on 1 July. 

Answering a question on how much revenue the changes would net the Government, Treasury Minister Ian Gorst said: “The expected revenue from extending the obligation to register for GST to all large offshore retailers has previously been conservatively estimated at £1.1 million annually.

“Now that larger offshore retailers have registered for GST and will be filing GST returns from November 2023, Revenue Jersey will have better information on the first full year’s results later in 2025.”

Pictured: Many islanders have reacted with shock and confusion to the new GST changes affecting online shopping.

Public finances will also receive a boost from the £75 reduction in the threshold, which is in place because the administrative cost of collecting the tax is deemed to be more than the tax itself at and below the £60 level.

So far, 23 retailers have registered to collect GST at the point of sale and file a Jersey tax return. Those with more than £300,000 of Jersey-based sales have a legal obligation to register.

The move has generated significant backlash, with more than 2,500 islanders signing a petition in favour of reversing the move. With more than 1,000 signatures, Ministers will have to issue an official response.

Concerns have also been raised that some retailers may charge UK VAT at 20% as well as Jersey GST. The Government has said that it has reminded the British Retail Consortium that goods destined for Jersey do not attract VAT and it will “seek to intervene” when it discovers instances of double-charging. 

In 2021, a Jersey lawyer sent a letter to online retailer ASOS to demand they stop charging what he believed were VAT-equivalent prices to islanders, warning of "potential legal proceedings" if not resolved.

Other islanders soon filled his inbox with records of similar experiences.