What is LVCR?

Low Value Consignment Relief or LVCR exempts goods of a certain value from VAT when they are imported into a member state. LVCR is a pre-single market piece of legislation that was intended to help the flow of goods between EU member states when they still had customs borders. It was an early attempt at free circulation i.e goods moving between member states without the imposition of tax. It was not intended to make the collection of VAT easier or cheaper as has been suggested by some commentators and the legislation makes no suggestion that this is the purpose of LVCR. With the removal of customs borders in 1993 then purpose of LVCR is now unclear as it only gives an advantage to non EU traders over EU traders. In the longer term we believe that LVCR is now redundant and should be scrapped.