HMV to Offer VAT-Free Games Instore
Posted by Tom Lee on 21 July 2008 - 17:58 · 14 comments & 6703 views
Entertainment retailer HMV is to begin offering VAT-free games via instore kiosks, under a new initiative called HMV Delivers.

According to a report in The Guardian, the company plans to extend the controversial VAT-avoidance scheme used by the company's website to stores across the UK, offering games, CDs, DVDs and Blu-ray movies minus the 17.5 per cent charged on items by the UK Treasury.

Many online retailers take advantage of the loophole that allows VAT exemption for products under GBP 18 that are imported into the UK from outside of the European Union.

HMV.com and Jersey-based Play.com already operate schemes to take advantage of the legal loophole originally designed to minimise the administration burden on marginal trade.

HMV has said that products on offer via the instore kiosks will be restricted to products not available on store shelves, according to the report.

View: Games Industry


There are 14 additional comments
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Quote this comment Reply to this comment #1 Posted by bmaher on 21 Jul 2008 - 18:24
Very clever of them, however, I bet it doesn't last too long.

On the other hand, how many current-gen games are there for < £18?
Quote this comment Reply to this comment #2 Posted by Xeta on 21 Jul 2008 - 19:05
VAT?
(1 reply) Quote this comment Reply to this comment #3 Posted by leesmithg on 21 Jul 2008 - 19:45
V.A.T. is value (v) added (a) Tax (t).

17.5% or 17.5 pence in every 100 pence you spend.

Or a scam to fleece shoppers of even more money.

HMV like all stores in Britian should offer v.a.t. free games, music, DvD etc, by selling them via Jersey like amazon does.

Anything less than £17.50 is v.a.t. free.
Quote this comment #3.1 Posted by Kirkburn on 22 Jul 2008 - 00:15
(leesmithg said @ #3)
Or a scam to fleece shoppers of even more money.

Even more money? Who do you think gets the money from the sale?
(1 reply) Quote this comment Reply to this comment #4 Posted by Michael1406 on 21 Jul 2008 - 22:16
Current gen games are >£30. I don't see this affecting much at all.
Quote this comment #4.1 Posted by +Cy Bones on 22 Jul 2008 - 11:35
If the kiosk is only selling stuff that is not available in the store, then I would imagine it only applies to special editions or older games, CDs and DVDs.
(2 replies) Quote this comment Reply to this comment #5 Posted by +Bubbo on 22 Jul 2008 - 00:18
How can they get away with this? Play.com does because it it Jersey based and operates entirely out of Jersey. Surely by having stores in mainland England, even if their HQ is in the channel isles, the mainland HMV stores are subject to VAT whatever they do.
Quote this comment #5.1 Posted by +Cy Bones on 22 Jul 2008 - 11:27
The instore kiosks are for another company - HMV Delivers, although it shares the same parent company.
This is just like Tesco using Tesco Jersey to deliver cheaper items VAT free.

I expect that the income from kisok sales wll be sent through the HMVD business rather then through the actual store, therefore bypassing the VAT requirements.
Quote this comment #5.2 Posted by stevehoot on 23 Jul 2008 - 18:35
Play.com is NOT based "entirely" out of Jersey.

Well OK - that's not true. "Play.com" does - but Play.com is owned by "The Web Factory" - which is based in Cambridge. EVERYTHING is done by The Web Factory, with Play.com simply being a big warehouse in Jersey. I'm talking IT, HR, Customer Services, Finance, Sales, Marketing, Management.... There's only warehouse operatives and a manager in Jersey...! :-)

Turn Play.com's website into a physical shop like HMV, and it's essentially same.
(1 reply) Quote this comment Reply to this comment #6 Posted by +Sam Symons Live on 22 Jul 2008 - 04:57
Is V.A.T. like G.S.T.? I don't think it'll last either.
Quote this comment #6.1 Posted by +Cy Bones on 22 Jul 2008 - 11:34
Yes, it's not a sales tax like you would find in the US but it is similar to systems in operation in Canada and Australia (which along with others use GST).

http://en.wikipedia.org/wiki/Value_added_tax
(1 reply) Quote this comment Reply to this comment #7 Posted by HawkMan on 23 Jul 2008 - 18:20
hmm just 17.5% damn, in Norway it's 25% or so, granted we also have even more consumer protection with the 2/5 year mandatory production fault warranty on anythign sold here among other things.
Quote this comment #7.1 Posted by +Cy Bones on 24 Jul 2008 - 12:03
Is the 25% a sales tax or is it for goods and services like our VAT?

I remember when VAT was 15%...
Quote this comment Reply to this comment #8 Posted by Esvandiary on 02 Aug 2008 - 11:17
Why do I get a horrible feeling that the only thing this will accomplish is the closing of this "loophole" entirely, which will probably mean everyone is now going to get screwed over on import duty regardless of the cost of the item...

I bought something from the Valve store in the US a while back, and I was charged quite a lot, although part of that was FedEx trying to extract money from me that I didn't owe them. I don't mind if it's a big purchase, it's the law - but that sort of an addition to something less than £18 is stupid - the reason the loophole was introduced in the first place, I suspect.
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