UK shoppers could buy duty-free onlineLandmark EU ruling could save shoppers billions

13 November 2006

 

Glasses of white wine in a row.

UK shoppers may soon be able to buy cut-price European cigarettes and alcohol over the Internet.

The European Court of Justice is set to rule whether the same laws which have benefited cross-channel ‘booze-cruise’ customers should also apply to armchair shoppers using the internet and mail order.

Normally excise duties on tobacco and alcohol is paid in the member state in which they are consumed, keeping tax revenues for the national exchequer.

But if customers buy quantities privately for personal use and transport them back to the UK themselves, they pay the tax rate of the country of purchase.

Landmark ruling

Next week European judges will decide whether this regime applies to goods bought for personal use over the internet and via mail order.

If the landmark change goes ahead armchair shoppers could then order goods from any EU country with a lower rate of duty - saving themselves hundreds of pounds per order.

The move would also be a serious blow to the Treasury, which collects about £15 billion a year in tax levied on cigarettes and alcohol bought in this country.

An Advocate-General's ‘opinion’ to the European Court of Justice has already advised that the rules should mean armchair shoppers can buy at local excise duty rates when ordering from abroad.

Excise duty rates

But the Treasury insists the final ruling on 23 November may not follow the Advocate-General's view.

A spokesman said: ‘There is no point speculating on the outcome of this decision. It is important to remember the court does not always follow the Advocate-General's opinion and that it is just that - an opinion.’

However, the judges do follow the Advocate-General's opinion in about 80 per cent of cases before the court - and the British Retail Confederation said such a move could hit British business hard unless excise duty rates are harmonised across the EU.