I dunno about the UK, but here if your revenue is over a certain threshold you have to start paying GST (our equivalent of VAT) and, at least in my small understanding, pretty much the only way that the asian parallel importers flooding trademe (our equivalent of ebay) are profitable is by neglecting to pay this tax.

Again, I don't know how accurate any of this is (or if it applies at all to the UK) but I know my brother was thinking of doing it with cellphones for a while and concluded it could be profitable or 100% legal, but not both.