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Gameplay slams online VAT loophole

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gamesindustry.biz logo Online game retailer Gameplay.com has begun a campaign calling on the government to close a loophole in European tax laws which allows offshore companies to import cheap goods into the UK VAT-free.

Under current legislation, anything worth less than £18 can be imported free of VAT, a price bracket which covers CDs, DVDs and budget videogames - key elements of the catalogue of goods offered by retailers such as Gameplay.com.

This loophole gives an unfair advantage to offshore companies, according to Gameplay managing director Andy Mee - who points out that many British-based Internet companies are now moving their businesses to the Channel Islands in order to remain competitive, with the cost being measured in British jobs.

"All the British Government does however is blame Brussels," he told the Yorkshire Post today. "When I asked why VAT could not be charged on all imports, or even a small levy, I was told it would take too much administration. The support it claims to have for e-commerce simply isn't there."

One of the main e-tailers to benefit from the tax loophole is Play.com, which is able to undercut its rivals in the music, DVD and videogame markets significantly thanks to its VAT-free prices.

Gameplay, along with Yorkshire MEP David Bowe, is calling on the government to follow the example of Belgium and opt out of this element of the tax laws, thus equalising VAT charging across all types of imported products. © gamesindustry.biz

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