Customers at HMV stores will be able to avoid paying VAT by ordering CDs and DVDs through digital terminals.

 

By Graham Tibbetts

Last Updated: 5:15PM BST 21 Jul 2008

 

The "HMV Delivers" kiosks are being installed across the chain's 240 UK branches over the next two years.

 

Their initial role will be to allow customers to order products that are out of stock in their shops.

 

The merchandise will then be sent from HMV's offshore site in Guernsey.

 

Under European law goods priced below £18 that are imported by individuals into the UK from outside the EU qualify for "low value consignment relief" and are exempt from the standard 17.5 per cent VAT.

 

The digital terminals will allow HMV to build on their current free home delivery service, which already operates from Guernsey and gives customers the opportunity to order out of stock goods online or at HMV counters.

 

HMV can offer free delivery from the Channel Island because the tax loophole more than covers the cost of postage.

 

Customers using the service could save £7 on the £25 store price of the Prime Suspect DVD box set, or £2 on Coldplay's latest album, Viva la Vida, which sells for £10.99 in HMV stores.

 

Aspokesman for HMV said that it was rare for its products to be out of stock and that the cost to the Treasury last year was around £140,000.

 

"Very few people used the service last year because our stores are well-stocked. We have the kiosks in five stores at the moment and we will roll it out over the next 18-24 months," he said.

 

"We expect this to remain an extremely marginal channel for sales. Our aim is always to have fully stocked stores so people can find what they want to buy."

 

The spokesman said the kiosks were ultimately intended to be used for downloading music, enabling customers to buy tracks and albums for their MP3 player.

 

However, the music industry still had to agree about making downloads compatible with all systems.

 

http://www.telegraph.co.uk/news/uknews/2439461/HMV-customers-to-exploit-tax-loophole-at-digital-terminals.html

*thinks*

 

Wasn't Our Price doing this a long time ago (ordering CDs/Videos in store for home delivery at cheaper prices)

 

But if I go to HMV and find a CD I was after was out of stock, I would try another shop, I don't see any reason to go in and order that CD from the internet, seems stupid