They're walking a fine line in "abusing it" though. Why is it correct that a shopper in the UK, who would normally pay 20% VAT on an item if sold from the UK online, or in shop, but pays a lot less because Amazon has the clout and size to setup an operation there?

It's similar to the changes a few years ago to the channel islands that was used (and some say abused) by online CD and DVD stores, including some large high-street names.

Now, the way this has been implemented, and the speed at which a lot of small retailers will have to change their systems is unfortunate, and the EU have shot themselves in the foot there.