I have just had a customer in th UK register a domain but they have given
their country as the US. US customers are not subject to UK taxes and thus
he has used this to avoid paying the tax he should.

Does anyone know where I stand with this - should the tax authorities
discover this am I or my customer liable.

I have to say that it concerns me that the WorldPay, my credit card
processor, accept the transaction when the country on the card does not
match the country submitted - I am sure that they used to reject this.

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