Level playing fields anyone...? Speculative fiction can predict subsequent reality. William Gibson's dark visions of a future filled with ubiquitous computer networks and virutal reality (revealed in Neuromancer and later works) posits the existence of "data havens", off-shore tax and legal restriction-free repositories for business information.
Today we have such off-shore reservations for money. And indeed they have a high degree of popularity amongst those capable of planning their financial affairs away from the clutches of the tax man. In the future, if information is really as closely linked to money as it is often suggested, we will indeed see these data havens as part of our fiscal/informational reality. The Internet makes this easy and cheap to do.
HM Customs and Excise is doing everything it can to make sure that Gibson's fiction becomes reality as soon as possible. They have taken the position that VAT is chargeable on business information delivered online. CompuServe's online service is (currently) exempt from the 17.5 per centVAT charge since they ostensibly provide their service from the US.
However, as US service providers struggle to provide Internet services for their membership, they are competing with UK Internet service providers that are obliged to charge a 17.5 per cent premium on their service. This advantage is hobbling UK businesses by giving a very large price advantage to the off-hore competition.
The alternatives for a UK provider are simple: justify to its customers the additional 17.5 per cent levy, or retire to an off-shore data haven at all deliberate speed.
HM Customs and Excise often seems so intent upon extracting the last pound of flesh and currency from British business that it is in danger of killing the goose that is on the verge of laying the golden egg of future British commerce.
Our government is very slow to realise that you can't extend the concepts of the Victorian era to organisations and technological capabilities that weren't even dreamed of a hundred years ago. It's bad enough that we have to pay vastly more for our telecom connections than do US businesses, without any additional own-goals.