UK government may close online shopping tax loophole

The gaming significance of the above headline may not seem apparent, but bear with us. This May, the UK government will consider "the continued marketing and use of highly aggressive and artificial tax avoidance schemes." As noted by VG247, businesses located in a certain part of Jersey (the UK one, not the one famous for GTL) are not required to include value added tax (VAT) in their prices. As such, many game sellers -- GAME, Amazon, Play, etc. -- base their businesses there, allowing them to sell games at lower prices than competitors (though only on items under £18).

MCV reports that the consultation planned for May will likely see current countermeasures extended. Said countermeasures allow the government to "enable the listing of specific tax avoidance schemes for direct taxes so that the subsequent use of such schemes will carry consequences for the user."

Within four years, the measures could earn the UK government as much as £4 billion. Of course, they would also have the added side effect of raising prices on certain games.

UK government may close online shopping tax loophole originally appeared on Joystiq on Thu, 24 Mar 2011 05:00:00 EST. Please see our terms for use of feeds.

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