Apple has confirmed that it is investigating the possibility of setting up an online store in the Channel Islands for local customers.

Residents of the bailiwicks of Guernsey and Jersey are exempt from VAT, as most UK laws do not apply on the islands unless requested by the local authorities.

But since Apple's online sales in the UK are based on the mainland, Channel Islands residents are having to pay tax on all products.

"In order to provide an optimum service quality to our customers, we are evaluating the need for a Channel Islands Apple Online store," an Apple spokesman told vnunet.com.

"In the meantime, customers continue to be able to purchase Apple products from our network of local resellers."

Similar online retailing operations have been started on the Channel Islands by Tesco, Asda, Britannia Building Society, HMV, Amazon and Woolworths.