In a surprise move, UK online retailer Play.com has announced that it will close its retail arm in March. The closure is due to the expiration of a tax loophole that prohibited items under £15 (around $24) in value from being sold with Value Added Tax, currently set at 20 percent. The removal of Low Value Consignment Relief in April 2012 seems to have hit Play quite hard as a result, with the retailer planning to make redundant all of its 147 staff in Jersey, as well as 67 people in Cambridge and Bristol.
Play is blaming the closure on the removal of a tax loophole
Moving forward, Rakuten-owned Play will instead shift attention towards its marketplace. The retailer will no longer sell items directly to customers, instead allowing users to list their own items — such as DVDs, video games, and electronics — on its website for sale, similar to Amazon and eBay. In the end, Amazon stands to gain the most from the closure — Play was arguably a direct competitor to the popular online retailer in the UK, with the store slowly expanding its range of items for sale over the years in order to offer a comparable service to Amazon.