The Forum of Private Business has been asked by Gordon Brown’s department to provide case studies of how an offshore tax loophole is affecting their members.
They say that a pre-Christmas price war between retailing giants such as Tesco, Amazon and Asda is driving many to the wall.
And they want to see the tax loophole closed that allows Jersey-based outlets to sell goods costing less than 22 euros at VAT-free prices.
The FPB is calling for the level at which goods are exempt from VAT to be lowered from 22 euros to 10 euros (about £7).
The group have also suggested that the UK should seek permission from the EU for a special dispensation to close the loophole altogether.
Deputy Gerald Voisin, president of Economic Development, said that it was always a worry when pressure groups lobbied against the Channel Islands.
However, he was confident that companies would adapt to meet the challenges of any changes forced upon them by Westminster or Brussels.
