Play.com to close down direct retail business as tax loophole closes

Marketplace will remain open

TODO alt text

Popular online entertainment retailer Play.com has announced that it will close down its direct retail operation.

The website, which has long offered some of the best deals on the web for DVDs, Blu-rays, games, consoles and boys toys, will shutter that side of its business in March 2013.

The announcement comes following the closure of a tax loophole in April 2012, which had allowed the Jersey-based company to be VAT-exempt on many of the goods it sells.

Play, owned by Japanese firm Rakuten, had taken advantage of the Low Value Consignment Relief loophole, which allowed it to sell goods without VAT if they were under £15 in value and sold from outside the EU.

No more gravy train

Many of the savings Play.com had made by exploiting the loophole had been passed onto consumers, including free shipping on all items from the site.

However the gravy train will come to a screeching halt in March, which is bad news for bargain hunters, but great news for Play's UK mainland competitors.

However, the company will continue to run the marketplace version of its business, where users can buy and sell from each other in much the same way as the Amazon Marketplace.

Play.com said in a tweet: "We're only closing our direct retail business. You can buy from our successful Play Marketplace as usual."

It is thought that over 200 staff will lose their jobs as a result of the closure.

Via Guardian