The ending of a VAT loophole that has made the Channel Islands an attractive base for e-commerce distribution centres may have a knock-on impact on the jobs market.

Jersey senator Alan Maclean told the BBC yesterday that the 700 jobs currently reliant on e-commerce have been placed at risk, alongside postal operations jobs.

Business lobby The Forum of Private Business welcomed the change, which it says allowed large firms “to significantly undercut smaller, independent retailers”.

The forum’s head of campaigns, Jane Bennett, says: “We are of course sympathetic to those Channel Island employees who may lose their jobs as a result of the ending of this industry, but we think it is entirely disingenuous for commentators to blame the loss of that employment on those attempting to correct what is clearly an unacceptable, unsustainable and damaging abuse of the tax system.”

Chris Gnapp, managing director of multi-sector recruitment consultancy Leapfrog Recruitment Consultants, based in Guernsey, tells Recruiter he is less worried, saying: “For us as a recruiter on the island, it’s not affecting anything but the minority of what we do.”

The homepage of Channel Islands recruitment firm 1st Recruitment’s website states “both Jersey and Guernsey offer attractive personal and corporate taxation advantages”.

But Gnapp says it is “too early to say how it may affect” retail distribution centres on the island or financial services clients, who he believes could experience minor knock-on effects.

Gnapp also mentions that the LVCR law change will not affect retail outlets on the island itself as the island will still not have VAT and believes that a legal challenge to the law change may happen.

Low Value Consignment Relief (LVCR) will cease on 1 April next year.