High street retailer HMV are set to roll out 250 'HMV Delivers' kiosks into stores across the country, allowing consumers to purchase goods, including videogames, totally tax free.

The scheme takes an advantage of a legal loophole that many online reatilers currently use allowing them to ship their goods from the Jersey tax haven, Guernsey, thus saving customers 17.5%.

The scheme has been critised by The Guardian who have also confirmed that Woolworths are looking a simliar scheme.

"If copied by other high-street chains and supermarkets, it could divert hundreds of millions of pounds from the Treasury," it claims.

The cheaper products won't apply to all items in store, instead the law states that retailers can only take VAT off any goods under the value of £18.

HMV dismissed the idea that the in-store scheme will cause problems, stating that it is only providing the same service that it does online. Furhermore, HMV stressed the fact that the main function of its kiosks will be to offer digital downloads and that VAT-free purchases will be restricted only to those items that are not currently available in stock.

Source :: Guardian