Play.com to shutter direct retail business, marketplace will remain

9 Jan 2013

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The UK government closed a VAT loophole that was costing the country’s exchequer millions last year, and this has led online retailer Play.com to decide to shut down its direct retail operations, and continue on as an online marketplace only.

Low Value Consignment Relief allowed Play.com to sell VAT-free CDs and DVDs from its base on the Channel Islands, as goods bought for less than stg£15 and imported to the UK from outside the EU were exempt from VAT. However, this tax relief was stopped by the UK government in April 2012 under pressure from retailers struggling to compete with the VAT-free prices that could be offered by online retailers.

The Guardian reports that 147 staff in Play.com’s Jersey offices will be made redundant, as well as 67 in Cambridge and Bristol.

Like Amazon and other major online retailers, Play.com also serves as a marketplace for other vendors to sell their wares, featuring more than 20m listings, and this side of the business will continue.

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Elaine Burke is managing editor of Siliconrepublic.com

editorial@siliconrepublic.com