Is this the end of cheap mail-order music?

A TAX loophole used by British companies to sell cheaper music and films could be closed by the Jersey government, it has emerged.

Some major supermarket groups and other retailers have been selling chart CDs from the likes of Coldplay for as little as £8.47 by setting up mail-order operations in the Channel Islands.

But this could change under new rules planned by leaders in Jersey, according to The Sunday Telegraph.

Senator Frank Walker, president of the island's policy and resources committee, told the newspaper that the publicity generated by the loophole had been unwelcome and damaging.

He said that in future, licences would only be given to UK firms that have a 'legitimate operation' on the island. This would not affect licences that have already been granted.

Under European law, retailers that operate outside the EU can sell products valued at less than £18 to customers in member states without charging VAT.

A number of companies making use of the loophole are understood not to pay tax to Jersey's government or employ islanders.