Although we are said to be in the middle of an Internet revolution, I am frequently struck by the lack of understanding of the Internet and the VAT implications of Internet trading. Much of the confusion arises because people use terms like Internet trading, E-commerce, E-business and so on without defining specifically what it is they are referring to. Perhaps more importantly many people do not really understand what the Internet is.
The Internet is essentially a vast network of computers which enables information to be accessed and transferred throughout the world. The Internet is used for two main types of trading. The first is electronic mail order shopping. By this I mean that the Internet provides a facility through which a prospective purchaser can access a vendor’s web-site, view his wares, decide what to buy, order and pay for it. The goods or services are then delivered in a conventional way, eg by post, delivery van or by someone coming around to perform the
