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Jersey's internet mail order industry is not under threat, according to the Economic Development Minister.

The UK Treasury is reviewing Low Value Consignment Relief which is blamed for forcing small UK internet retailers to close.

Jersey has a special status where goods under £18 are VAT-free when sent to the UK from outside the EU.

It led firms such as HMV, Tesco and Amazon to open big warehouse operations on the Channel Islands.

But Senator Alan Maclean, Economic Development Minister, said the industry is not under threat.

He said an agreement was reached to stop UK companies coming over to just take advantage of the VAT-free prices, and 17 UK companies were asked to leave Jersey in 2006.

He said Jersey welcomes companies that want to move to the island and employ staff and contribute to the economy, but not people who just want to avoid paying UK tax.

Senator Maclean said it had been an ongoing saga for some time, but given the VAT increase this year the UK treasury may now change their mind and decide to collect the money they are losing.