14th November 2023

Worried you’re being charged both VAT and GST?


With online retailers now charging GST on purchases, we’ve been contacted by many consumers who are worried they’re unfairly being charged both GST and VAT.

We’re trying to build a list of those online retailers who are, genuinely, wrongly charging Islanders both VAT and GST so that we can work with the Government to stop this from happening.

If you encounter any examples of this, please take a screenshot or photograph of the checkout/basket and email it to contact@consumercouncil.je

 However, here’s a couple of things that you should be aware of:

Incorrectly labelled VAT

A few consumers have been in touch to tell us they’re incorrectly being charged VAT. However, when we’ve looked into their cases, we’ve found that they’re in fact being charged GST, but that the retailer has simply incorrectly labelled the tax as ‘VAT’.

A simple way to check whether the extra charge you can see is VAT or GST is to download the ‘VAT calculator’ app to your smartphone or mobile device. It allows you to put in the amount and then either add or deduct VAT. It then tells you what the price should be once the VAT has either been deducted or added. This will help you identify whether it’s actually VAT being applied, or whether it’s simply GST incorrectly labelled as VAT.

Or, of course, you can always do some old-fashioned arithmetic instead – if it’s VAT it’ll be 20% added on, whereas if it’s GST it’ll only be 5%. To work out what a VAT-free price should be, divide the total amount by 1.2.

Sometimes consumers are being charged just VAT, which of course we do not pay. If this happens to you, we suggest that you go back to the retailer and attach the link to the UK Government notice on VAT, which states:

2.7 Countries that are part of the UK for VAT purposes.

The Channel Islands are not part of the UK for fiscal (VAT) purposes. Supplies of goods sent to the Channel Islands are regarded as exports for VAT purposes and may be zero-rated if the conditions set out in paragraphs 3.3 or 3.4 are met.

Of course, this may not work, the retailer might still charge you VAT. Then your only recourse is to take your business elsewhere and keep looking around until you find a retailer who is prepared to deduct VAT – they are out there.

Online book prices will now increase

When you purchase many items online, especially on Amazon, you’ll notice that the final price will end up being lower than the original price listed. That’s because, even though 5% GST is now being added, the 20% VAT is also being removed, so the price still goes down.

However, there is at least one item we’ve found that’s the exception to that rule: books.

We’ve heard from a few consumers who are worried that every time they buy a book online, they’re now being charged GST on top of VAT.

That’s because when you now buy a book online, the final price always ends up being higher than the original price listed.

However, it’s not an error. The reason is because, in the UK, books are exempt from VAT – which means that the original price listed is not inclusive of any VAT.

This means that GST now has to be added to these purchases for Jersey residents, but no VAT is removed, so, as a result, the price ends up going up, instead of down.

You can see more information about this, and other items that are exempt from UK VAT, here: gov.uk/guidance/rates-of-vat-on-different-goods-and-services.