UK retailers could be left out of pocket as Her Majesty's Revenue and Customs clamps down on corrupt distributors.
Fraudulent suppliers have been buying consoles from abroad without paying VAT, then selling the machines on to UK retailers with the VAT added on top.
These temporary traders then disappear, and when the retailer tries to claim the money back on its VAT return, HMRC may refuse to pay – as it never received the tax in the first place.
The dubious and illegal practice is called ‘Missing Trader Intra Community' fraud. MCV understands that indies and smaller retailers have had their fingers burnt by the practice most commonly when trying to obtain cheaper Wii hardware and other similar games items.