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.