A small firms pressure group was today taking its battle over a VAT " loophole" in the Channel Islands to a crunch meeting with the Government.
The Forum of Private Business (FPB) says it plans to turn up the heat on retail giants exploiting the discrepancy, by taking its campaign to key talks with HM Revenue and Customs.
The FPB's campaign centres on what the pressure group calls a loophole which allows big retailers to sell products like cut price CDs, DVDs and contacts lenses through Jersey and Guernsey VAT free.
FPB chief executive Nick Goulding said: "We will be telling HM Customs that high street shops are being fatally undermined by this anti-competitive and deeply cynical tax dodge.
"The loophole needs to be closed so independent shops can compete on a level playing field. We must not forget that we have lost 20,000 high street shops since 1997 and 41 per cent of our high streets are now described as clone towns."
Mr Goulding said he will stress to Customs that a Jersey Government crackdown, preventing new retailers setting up on the island, is of limited use.
He said: "Jersey is talking tough, but in reality its supposed clampdown amounts to locking the stable door after the horse has bolted."
The majority of retailers were already based on the island and the move would not affect their trading.
Guernsey had made no commitment to clampdown on the industry and was continuing to allow retailers like HMV to set up on its shores.
He said: "Therefore, unless the Government acts swiftly, this sore will continue to fester and small businesses will go to the wall."