Officials from HM Revenue & Customs have assured the Forum of Private Business that their department is keeping under review the issue of how retail giants including Asda, Tesco and HMV are exploiting a Channel Islands VAT loophole to undercut high street traders on the British mainland.
The assurance came when leaders of the national business pressure group met HMRC officials in London.
After the meeting, FPB chief executive Nick Goulding said: "Officials of HM Revenue & Customs told us they were actively keeping under review this tax loophole which is losing this country over £80 million in tax revenue and threatening the viability of hundreds of shops and businesses trading in the like of music CDs, DVD films, contact lenses, and health food supplements."
Mr Goulding also reported that, following a meeting with the National Audit Office, the Parliamentary watchdog was also investigating tax revenue slippage through e-commerce trading over the internet, such as sales of CDs into Britain from tax free off-shore locations like the Channel Isles.
The FPB is angry at a loophole which allows big retailers to sell products through Jersey and Guernsey VAT free.
"We told HM Customs that High Street shops in Britain are being fatally undermined by this anti-competitive and deeply cynical tax dodge, as they cannot compete on price," said Mr Goulding.